Cross-National Research Papers
Seventh Series:
European Cross-National Research and Policy
1. Researching the European Social
Model from a Comparative
Perspective
Edited by
Contributors
Linda Hantrais
Denis Bouget
Milena Büchs
Ana Guillén
Nick Manning
Georg Vobruba
Cross-National Research Papers
Seventh Series
European Cross-National Research and Policy
1. Researching the European Social
Model from a Comparative Perspective
Edited by
Linda Hantrais
Contents 3
Contents
List of tables and figures
3
Editor’s foreword
4
1.
2.
3.
4.
5.
Researching the European social model from a comparative
perspective
Ana Guillén
5
Conceptualising the impact of economic globalisation on the
European social model
Georg Vobruba
8
The transferability of welfare models between East and West
Nick Manning
19
Methodological and conceptual issues in researching the Open
Method of Co-ordination
Milena Büchs
31
Convergence in social welfare systems: from evidence to
explanations
Denis Bouget
42
Notes on contributors
55
List of Tables and Figures
Tables
3.1
Typologies of social policy and reform in CEE countries, 1995–2000
22
Figures
5.1 Coefficient of variation of per capita social expenditure in OECD and EU
countries, 1980–98 (constant prices 1995, PPPs 1995)
5.2
Standard deviation of percentage of social expenditure in GDP in OECD
and EU countries between 1980 and 1998
Cross-National Research Papers 7 (1), November 2003
44
44
European Research Centre
4 Editor’s Foreword
Editor’s Foreword
The seminars on which this new series of Cross-National Research Papers is based
are a response to the perceived need for a forum at which social scientists can discuss
the issues arising in research that crosses national, cultural and disciplinary
boundaries, thereby enabling participants to learn from past experience and to plan
more effectively for future international work. The seminars maintain and build on the
research of existing international teams. They are consolidating links between social
science research and wider society. An important aim of the seminars is to provide an
informal environment for the exchange of knowledge and ideas with policy actors
interested in the lessons that can be drawn from social science research.
The papers address the theoretical, methodological, managerial and practical
problems arising in comparative social science research projects across EU member
states and candidate countries, with the overall aim of contributing to a better
understanding of the research process, improving the quality of international social
science, and encouraging dialogue and transfer of knowledge between researchers
and policy actors.
Specific methodological objectives of the seminars and ensuing publications are:
• to contribute to methodological advances in cross-national research;
• to develop robust theoretical frameworks for comparative analysis of social systems
and policies;
• to offer training opportunities to researchers embarking on international projects;
• to create synergy between researchers from different cultural traditions within the
European context;
• to promote mutual understanding of regional diversity within the European Union
and Central and Eastern Europe;
• to analyse social constructions of concepts, and factors affecting the comparability
of quantitative and qualitative data, and of indicators in European projects;
• to share and disseminate knowledge and promote dialogue between researchers,
policy actors and users;
• to foster good practice in cross-national comparative research;
• to identify the conditions necessary for successful policy transfer and learning.
The six seminars are exploring the central theme of modernisation of the European
social model within the context of socio-economic change, European integration and
enlargement, and the policy challenges they present for governments. The papers from
the first seminar, published in this volume, set the scene by introducing the
comparative approach and the substantive content for the series. The authors examine
the research methods adopted in the analysis of welfare systems from a comparative
perspective and indicate the relevance of the research for policy development.
We are grateful to ESRC for the Seminar Competition Award (RES-451-26-0020,
2003–04) that is funding the seminars and publications. We should also like to thank
the Jean Monnet EuroCentre in the Department of Politics, International Relations and
European Studies at Loughborough University and the Science and Technology
Service of the French Embassy in London for the additional support they gave for the
first seminar in the series, held at Loughborough University.
Linda Hantrais
Cross-National Research Papers 7 (1), November 2003
European Research Centre
Researching the European Social Model from a Comparative Perspective 5
1. Researching the European Social Model from a
Comparative Perspective
Ana Guillén
Even if the construction of a European social model lags well behind that of a common
market, European social policy, understood as the acquis communautaire, has made
significant progress since the late 1990s, and more especially since the Lisbon Summit
of 2000 and the introduction of the Open Method of Co-ordination. Despite the
heterogeneity persisting among European national welfare states, and which is likely to
grow as a result of enlargement, the distinctiveness of the European Union in relation
to other industrial powers lies in the existence of mature welfare states among its
members. While macro-economic decisions are taken at the level of the Union as a
whole, the principle of subsidiarity means that decision making in the field of social
policy remains in the hands of national and sub-national governments who are fighting
to protect their own interests and needs. As a result, the achievements of European
integration have advanced much further in the area of common macro-economic
policies than in the political and social domains. This situation poses a number of major
challenges for the future of social protection, which are spelled out in the papers
included in this volume. The authors examine a wide range of issues that are relevant
to social policy change and reform within Europe: globalisation, European
enlargement, the processes of policy diffusion and policy learning, convergence and
divergence.
First, economic globalisation and the need to enhance competitiveness on the part
of national economies may induce retrenchment of existing levels of social protection,
raising questions about the compatibility between competitive economic policies and
comprehensive and strong social protection systems. Whether mature welfare states
constitute dead weights on economic progress or, on the contrary, are useful tools for
competing in an internationalised economy is still a matter of heated debate. Georg
Vobruba addresses this question in his paper by analysing the conditions under which
economic and social policy may go hand in hand to produce virtuous circles.
Second, existing heterogeneity of national social protection systems raises the issue
of whether the tendency has been for social protection standards to converge or
diverge in the recent past, and what the challenges are for the future. These questions
are relevant for European integration from an economic, political and social
perspective. Economic integration is needed to promote mobility not only of capital but
also of workers. The existence of diverse systems of social protection makes the
mobility of workers problematic. Political integration is likely to remain weak, unless a
sense of European identity and citizenship rights can be developed. Social inclusion is
crucial if such rights are to be achieved. The question of whether European welfare
states have tended to converge or diverge is particularly salient in this respect. In his
discussion of convergence, Denis Bouget analyses recent patterns of change in
European member states and offers tentative explanations for the trends observed.
Third, the evolution in the past and the present situation of Central and Eastern
European welfare states is of central importance on the eve of the Union’s
enlargement. Nick Manning analyses the changes that have taken place in the
transition countries, including the case of Russia. The enlargement of the Union poses
Cross-National Research Papers 7 (1), November 2003
European Research Centre
6 Ana Guillén
major challenges for the future and is raising a large number of questions for
researchers. With regard to social protection, diverse situations persist, entailing
different levels of inequality and exclusion between countries and within regions and
localities in the same country. In-coming countries are less developed in economic
terms and enjoy less effective systems of social protection than current members.
Furthermore, new members will have to adapt to a more demanding acquis
communautaire than that faced by Greece, Spain and Portugal when they joined the
Union in the 1980s.
Fourth, European integration is closely related to processes of policy diffusion,
policy learning and policy transfer, both within the Union and between the Union and
other geographical areas and international agencies. The process of construction of
the European Union has enhanced learning about, and from, the experience of others.
Policy learning has been made possible by the increase in institutionalised interaction
among policy makers, the formation of epistemic communities and the publication of
comparable information, stimulated by the Open Method of Co-ordination (OMC). This
development has resulted in processes of policy emulation and policy adoption, or
rather adaptation, since original policy formulations are usually re-interpreted in the
light of national or subnational cultures, traditions and policy styles. The mechanisms
by which policy diffusion and policy learning occur are elusive and difficult to analyse.
Milena Büchs offers an analytical framework for interpreting the impact of the OMC
with reference to labour market policies in two major European member states,
Germany and the United Kingdom. Although her framework was intended to enable the
comparison of the policy process in the two countries, it could prove useful for
interpreting other processes of learning and diffusion.
All four authors attempt to unpack concepts. They propose methods for the
advancement of research in the comparative analysis of welfare states. Georg
Vobruba offers a definition of globalisation in general and of economic globalisation in
particular. Both definitions are linked to institutions and their interplay with collective
action. He claims that, while most definitions offer an objective view, it is important to
adopt ‘a two-level approach’, so that the subjective view is also incorporated. This
leads to a different approach to the construction of causalities. Vobruba also refers to a
two-level approach when he discusses the European social model. He underlines the
fact that globalisation is far from being a new phenomenon. Rather, it is a long-lasting
trend and a reversible process. He argues that research should pay more attention to
domestic and transnational conditions for globalisation.
In his presentation of the evolution of Central and East European welfare states,
Nick Manning observes a clear split among the 27 countries he analyses into three
different categories. He argues that path dependency has affected national settings in
different ways and attributes the split to a recent process of divergence. The EU
accession group can be labelled as a ‘recovery group’, since they enjoy economic
growth and have the capacity to act to promote social protection. The paper also
shows how the decision-making processes that developed after the communist parties
lost control led to the appearance of new national and international actors. Nick
Manning draws attention to the fact that different research questions (and
methodologies) lead to different research findings. He stresses the need to collect
original data, especially in the cases of accession countries where policy change is
both intense and rapid, using semi-structured interviews with policy actors and
Cross-National Research Papers 7 (1), November 2003
European Research Centre
Researching the European Social Model from a Comparative Perspective 7
comparative case studies. He advocates the collection and analysis of survey data to
assess policy change and impact on different social strata.
Milena Büchs unpacks concepts of policy influence to distinguish direct, concealed
and catalysing types of influence. She also examines definitions of deliberation,
shaming, policy networks, policy diffusion, lesson drawing and policy transfer that can
usefully be applied in interpreting the influence of the OMC on the policies of member
states.
The imminent enlargement of the European Union heightens issues of convergence
and divergence among member countries. Denis Bouget responds to these concerns
by tackling the question of what exactly we mean by convergence. His discussion of
convergence models is based on an extensive review of the existing literature.
Together, the papers bring to bear a range of research methods. They have in
common their emphasis on the need to incorporate subjective perceptions, by ‘going
and asking people’ about their views and attitudes on social policy impacts as a
complement, or even an alternative, to the objective observations of researchers. This
approach is especially important in the case of social groups lacking political voice or,
in general, for socially excluded categories.
In sum, we are in need of an intense debate on how and by what means social
policy can be made to produce positive results, both in current and new member states
that are lagging behind. This set of papers constitutes a valuable contribution to the ongoing discussion about how to achieve a more ‘inclusive’ Europe.
Cross-National Research Papers 7 (1), November 2003
European Research Centre
8 Georg Vobruba
2. Conceptualising the Impact of Economic
Globalisation on the European Social Model
Georg Vobruba
The central hypothesis of the paper is that the European welfare state is a
quintessential strength and a basic requirement for the further successful development
of Europe in the wake of intensifying globalisation effects. Yet, these effects pose
threats to its survival, placing the European social model in something of a dilemma.
Nonetheless, whilst recognising the challenge to EU welfare states of the rapidly
increased capital mobility of labour, the paper argues that social policy is a necessary
legitimising factor for globalisation to compensate losers in the process. Although it is
being increasingly challenged, the continuing impact of path dependencies in welfare
policy should not be underestimated. These contentions form the parameters for an
investigation of conceptual and methodological problems in unravelling the effects of
globalisation on the European social model. The paper suggests ways of approaching
the measurement of globalisation in terms of time, spatial and sectoral effects as a
means of assessing which social models are economically, socially and politically
feasible in the long run. The themes addressed include approaches to the
conceptualisation and measurement of globalisation, the economic and social impacts
of social policy, and conceptual and methodological concerns in delimiting
transformation processes.
Nowadays, globalisation is on the defensive. Why should this be? The dominant public
social construction of globalisation has changed from a material constraint into a ‘hate
term’. It has mutated from describing an unavoidable trend within capitalism into a
symbol of an elite conspiracy against the people. From pure economic logic, it has
turned into a subject of political decisions and conflicts. Following the failure of the
World Trade Organisation conference in Seattle in 1999, it became obvious that
globalisation could be opposed. The collapse of the world trade talks in Cancún in
2003 strengthened the public perception that globalisation is not only a danger but is
also in danger.
What is globalisation? Any definition should match the following requirements: it
must have institutional change as a focus; it must provide the opportunity to link this
perspective with individual and collective action, either as causes or as consequences
of change; and it must refer to the public use of the term and its effects. For the
purposes of this paper, globalisation is defined as a process of institutional change,
which leads to an intensified interdependency of remote living conditions, stimulating
an increasing entanglement of interest, of which people worldwide are increasingly
aware (Therborn, 2001, p. 450). Social sciences have to deal with globalisation as a
practical social construction, which requires second order observations and a two-level
approach: they need to observe how relevant actors perceive the phenomenon.
The present globalisation process has historical precedents. It has been, and will
continue to be, triggered by politics at the national and transnational level (Held and
Koenig-Achibugi, 2003; Zürn, 2003), and it depends on social preconditions. What we
observe is not globalisation as such, but a construction by social and political actors
Cross-National Research Papers 7 (1), November 2003
European Research Centre
Conceptualising the Impact of Economic Globalisation 9
based on their interest-driven observations. Thus, when sociologists speak of
‘globalisation’, they are referring to second order observations.
Some authors concentrate on one or the other of these features. Globalisation has
been set in a long historical perspective (Borchardt, 2001; Robertson, 2003).
Arguments have been assembled against the thesis of the powerless state (Cerny,
1996; Weiss, 1998) and in support of the social preconditions of globalisation (Rodrik,
1997; Vobruba, 2001; Rieger and Leibfried, 2003). Attempts have been made to
conceptualise globalisation as a construct (Jordan 1998; Schmidt 2002). No
longitudinal analysis has yet been undertaken of public perceptions of globalisation,
and no empirical knowledge is, therefore, available about their development. The most
advanced research on cross-national perspectives is by Martin Seeleib-Kaiser (2001,
2002). In relation to the immense body of economic and transnational elites literature
insisting on the contradiction between globalisation and national welfare states, these
contributions are still exceptions. Moreover, such critiques have so far scarcely led to a
reconceptualisation of research on globalisation.
This paper deals with two questions: firstly, how to deal with the features of the
globalisation debate outlined above; secondly, how to assess the impact of
globalisation on the European social model and its core, the welfare state. To cope
with the problem of organising the superabundance of contributions to these topics, the
paper develops the theorem of the ‘globalisation dilemma’ (Vobruba, 2001), which
makes it possible to bundle together the, as yet, isolated critiques of the globalisation
debate and to give some indication of how to avoid its deficits. This discussion leads
into a short sketch of the specific constellation of the European social model within the
contemporary globalisation process.
Globalisation and the European social model
How can the European social model be conceptualised? The approach adopted in the
paper consists of two components. First, it must contain a description of institutions
that typically enable characteristic patterns of action to be identified. If we agree that
explaining institutional social change means referring to individual action, which is
framed by institutions, then the impact of globalisation on a social model must
ultimately focus on the nexus between globalisation and national institutions. The
question is how globalisation influences institutions and characteristic patterns of
action. Secondly, it is important to remember that constructing a European social
model is not only an academic affair. At least to some extent, political and social actors
within society think and talk about a European social model, identifying with it and
linking outcomes to it (Abrahamson, 2000), which involves second order observations.
Two basic strands of research can thus be identified: firstly, description of the main
characteristics of the European social model, theorising interrelations and pointing to
outcomes; secondly, empirical questions as to whether relevant actors do talk about a
European social model and, if so, how they describe it, what characteristics they
attribute to it and how they act according to their understanding of it.
Despite the great organisational diversity, state-provided social security is, and can
be seen as, a common institutional feature in Europe (Gough, 1997). Social security
has a critical impact on individual action. It reduces the unpredictability of the future
with respect to one of its most important dimensions: the material preconditions of
individual existence. By mitigating immediate economic constraints, it provides a long-
Cross-National Research Papers 7 (1), November 2003
European Research Centre
10 Georg Vobruba
term perspective for individual action. In this respect, European welfare states
contribute to a long-term orientation, which is built into the European social model
(compared to the US). Social security reduces constraints and provides people with
additional room for manoeuvre. Thus, social security causes ambivalent outcomes. On
the one hand, the room for manoeuvre enables people to take on risks, to contribute to
economic and social innovations and, ultimately, social change, or at least to tolerate it.
On the other hand, the mitigation of economic constraints opens up the possibility of
maintaining the status quo (Vobruba, 2003)
If this conceptualisation of the impact of state-provided social security is adequate,
then the question of how globalisation affects European welfare states lies at the core
of an understanding of how it impacts on the European social model.
GLOBALISATION AS A HISTORICAL TREND THAT MIGHT BE INTERRUPTED
The idea of globalisation, and the place it occupies in ‘world society’, is as old as
modernity itself. The term first came into use as a normative orientation within
philosophical discourse. Emmanuel Kant (1912–23) was able to present his ‘weltbürgerliche Absicht’ as an optimistic moral project in the same way as ‘proletarian
internationalism’. The emergence and development of capitalism led to the process of
realising the world society. Thus, the normative idea of a world society came to be
accompanied by real-globalisation, namely by increasing foreign trade, transnational
competition and migration. Not surprisingly, real-globalisation distorted the central
normative expectations of the idea of a world society, because it by no means led to a
global community implying the potential for global solidarity. Rather, it triggered new
conflicts of interests.
Globalisation is neither something entirely new, nor does it develop with great
speed. Robbie Robertson (2003) speaks of ‘three waves of globalization’, pointing to
the expansion of early high culture empires, and two further waves of globalisation: the
one in the course of expansion of the industrial capitalist system and the other in the
present wave. Arguably, subsuming early high cultures and capitalism into a single
perspective results in a problematic overgeneralisation. Nonetheless, it is important to
note, that, within the development of capitalism, we are facing the second wave of
globalisation, entailing a severe economic decline and several decades of nationalistic
isolationism (Borchardt, 2001). Observing globalisation in a long historical perspective
draws attention to three important points. Firstly, not only theoretical arguments but
also empirical clues can be found to show that globalisation is a trend inherent in
capitalism. In the very long run, globalisation seems to be a steady economic trend in
the modern capitalist world society, but it can be interrupted. Secondly, although
globalisation has never been an automatism, it has been stimulated by political
decisions. This feature has become more visible to the public due to a number of
recent basic decisions and treaties (NAFTA, EU, MERCOSUR). Thirdly, even if, in the
perspective of single countries, the process of globalisation might be unavoidable, in
the short term, it can be evaded. Participation and non-participation in the globalisation
process have causes and consequences that can be anticipated and are subject to
political calculation and decisions.
THE GLOBALISATION PROCESS AND POLITICAL DECISIONS
Political actors worldwide are driven by the conviction that, at present, a dramatic
thrust of globalisation is occurring. The ‘globalisation shock’ is a term often used in
Cross-National Research Papers 7 (1), November 2003
European Research Centre
Conceptualising the Impact of Economic Globalisation 11
public and scientific discourse, suggesting the idea of an unexpected, sudden
development beyond political control. In reality, the globalisation process is neither
new, nor is it occurring at great speed.
Paul Hirst und Graham Thompson (1996, p. 22) have collected data to describe
processes of transnationalisation of national economies since the 19th century. If the
volume of foreign trade is taken as an indicator, transnationalisation is found to have
increased steadily until the beginning of the First World War. It stagnated between
1913 and 1929 and collapsed in the course of the world economic crisis. World trade
did not recover until the end of the Second World War.
The ‘relative openness’ of important national economies, defined as the volume of
foreign trade (exports plus imports) as a percentage of GDP, steadily increased from
1950, but not at a spectacular speed. In 1973, it was at a lower level than in 1913. The
data on migration into the United States, the world’s most important goal for migration,
show a similar feature. Although foreign trade is still a major force in transnationalisation, since the 1960s foreign direct investments are increasingly
superseding it, with the result that the volume of worldwide foreign trade is increasing
faster than GDP, and foreign direct investments are increasing faster than the volume
of foreign trade. Compared with foreign trade, the fast growing volume of foreign direct
investments lies in the fact that they are more likely to endanger the autonomous
political scope for manoeuvre, and it is more difficult to regulate them. These features
are of crucial importance for the analysis of new qualities in the current processes of
globalisation, in particular for assessing the impact on national welfare states.
Participating in the globalisation process causes pressure on modernisation, by
creating costs that are distributed unequally between people and over time, creating
winners and losers. In the short run the costs are greater, while in the long run the
gains are greater. Whereas it is usually clear who is bearing the costs, the gains
appear to be more diffuse. As a result, a typical problem arises for processes of
modernisation and transformation of societies: the bearers of the short-term costs tend
to prevent society from developing in a way that might, in the long run, be to the
advantage of all. Short-term losers may, therefore, jeopardise participation in the
globalisation process, with the result that society as a whole misses out on the longterm benefits of globalisation. Any political management of modernisation has to cope
with coalitions of employers and employees that oppose participation in the
globalisation process.
Under the pressure of international competition, the distinction between
globalisation winners and losers is more important for the organisation of interests than
the distinction between capital and labour. The shared expectation of being a loser in
international competition spurs coalitions between employers and employees to
prevent free trade. Usually, such efforts are accompanied by rhetoric focusing on the
national community and on a class-transcending national ‘solidarity’. In some historical
cases, such coalitions between capital and labour against transnational integration are
extremely destructive with respect to domestic as well as foreign politics. Hans Rosenberg (1967) has rightly stressed that a direct path exists from German economic
protectionism at the end of the 19th century towards national socialism. More
concretely, the development of parts of German heavy industry directly led to national
socialism (Ullmann, 1988, p. 143).
However, it is not necessary to focus exclusively on such an extreme form of
isolationism and violence. The history of several dictatorships teaches us that
Cross-National Research Papers 7 (1), November 2003
European Research Centre
12 Georg Vobruba
isolationistic attempts fail, but they fail after a long time and at immense costs. Their
failure is caused by the discrepancy between their imagined and real autonomous
economic capacities. Numerous historical examples can be cited of this vicious circle.
Economic isolationism accompanied by nationalistic community rhetoric is followed by
political isolationism. Economic isolationism causes losses in economic efficiency and
increasing welfare gaps vis-à-vis other countries. At the extreme, political isolationism
can turn against its people. Manifestations of discontent are suppressed in the name of
the common national interest. Cases in point are the socialist countries and Spain
under Franco.
As world society develops from humanistic imagination into reality, awareness
increases that participating in the globalisation process causes costs. To avoid these
costs, the presumed losers are likely to oppose all political decisions that result in an
intensified participation in international competition. For these people, the nation state
becomes a bulwark against globalisation.
Endangered globalisation or the dangers of globalisation
The essence of these historical examples can be briefly summarised as follows: as in
rapid modernisation processes in general, a country’s participation in the globalisation
process causes winners and losers. Four possibilities can be distinguished. The first
two types do not cause problems:
1. Short-term and long-term winners support the participation in the globalisation
process.
2. Short-term winners become long-term losers, but do not represent a serious threat.
The second two other types are both problematic and interesting:
3. Short-term losers, who become long-term winners cause the political problem of
bridging.
4. Short-term and long-term losers represent the problem of compensation.
Successful participation in the globalisation process crucially depends on the
presumed losers. The key question is, how to make the costs associated with
globalisation bearable and to offer something to the presumed losers.
Public discourse on globalisation increasingly focuses on the losers. Globalisation is
primarily seen as a major cause of rising inequalities between the first and the third
world as well as within countries (Wade, 2003). With regard to Europe, the political
construction between globalisation and national welfare states has undergone a
remarkable change. In the past, globalisation was perceived as a material constraint
with retrenchment of the welfare state as the unavoidable consequence. Whether it is
due to pure economic ideology, a political strategy of blame avoidance or true
convictions, a negative nexus between globalisation and social security has been
established. Globalisation is unavoidable, so should we forget about the welfare state?
This nexus still persists, but its political impact has changed, as the public perception
of globalisation as an economic constraint has turned into an understanding of it as a
result of political decisions. If more globalisation means more inequality and less social
security, then should we drop globalisation?
The need for social policy
The argument that follows excludes the possibility that national elites promoting the
participation of their country in the globalisation process can overcome the resistance
Cross-National Research Papers 7 (1), November 2003
European Research Centre
Conceptualising the Impact of Economic Globalisation 13
of presumed losers by non-democratic means. The next question is, therefore, how
losers in globalisation might effectively veto participation in the globalisation process.
Within democratic systems, capital interests alone can hardly prevail. The political
importance of globalisation losers derives from coalitions of employers and employees
within loser branches of the economy. Such coalitions emerge on the basis of the
common interest of capital and labour to maintain ‘their’ firm. This explains why
representatives of business interests call for protectionism in the name of the
protection of national labour, which immediately elucidates the importance of social
policy in making participation in the globalisation process feasible. This raises the
question of why social policy is a precondition for successfully participating in the
globalisation process.
The chance of achieving protectionism is based on the fact that workers are
dependent on their workplace. Their dependency is higher in cases where they have
no alternative means of making a living. Any room for political manoeuvre against
claims for protectionism must then be based on institutions that mitigate the workers’
dependency on their place of work.
The theoretical argument about the additional use of social policy has shown that
buffering the negative consequences of processes of modernisation is a classical
effect and can be a task for social policy. Within the framework of systems theory, it
has been argued that social policy enforces functional differentiation. In particular, it
enables the economic system to focus exclusively on efficient production by shielding it
from social demands (Huf, 1998). From a theory of action perspective, social policy as
a source of income can be seen as mitigating individual problems of material existence
and the constraints of the labour market. Consequently, politics that, at least
temporarily, endanger the workplace improve its chances of being tolerated, if the
people involved and the enterprise can rely on social policy. Any further recourse to
social policy leads to the hypothesis that the success of the political decision to
participate in the globalisation process depends on one country’s ability to compensate
for its costs through social policy. More specifically, presumed losers in the
globalisation process must be able to expect that their welfare state will provide them
with some form of compensation. Historical examples (Rieger and Leibfried, 1998), as
well as empirical evidence from international comparative research (Graham, 1994),
provide at least some support for this hypothesis. We can conclude that social policy
adds to the chances of globalisation being successful and sustainable.
So far, arguments have been presented in favour of the thesis that governments
need to support their decisions to participate in the globalisation process using social
policy. This does not tell us whether they are able to do so. The dominant assumption
is that globalisation undermines the material basis of national welfare states (Wilding,
1997). The globalisation dilemma can, therefore, be formulated in the following terms:
social policy is a precondition for globalisation, but globalisation undermines national
welfare states.
Out of the globalisation dilemma
Empirical evidence can be found in the history of Europe in the 20th century that,
contrary to present common sense thinking, globalisation and the development of
modern welfare states in Europe can, at least, coexist. They do show some remarkable
similarities. The development of modern European welfare states began at the turn of
Cross-National Research Papers 7 (1), November 2003
European Research Centre
14 Georg Vobruba
the 20th century. After the end of the First World War, they stagnated at the level they
had reached at that point. During the world economic crisis, a certain dismantling of
welfare states occurred, varying from country to country. After the Second World War,
a new phase of expansion occurred. The full maturity of European welfare states is a
result of the 1950s and 1960s. Within the past few decades, the development of
welfare states has again been stagnating. With the exceptions of countries like New
Zealand, the prognosis of a dismantling of welfare states (Borchert, 1995) appears to
be highly exaggerated.
The development of globalisation shows a surprisingly similar pattern. Within the
decades before the Second World War, a rapid increase occurred in international
entanglement. The period between the wars saw a remarkable setback, and then, in
the 1950s, globalisation again increased. Since then, the trend has been steadily
upwards. Finally, not unlike welfare state development, the upwards trend has
flattened in recent years.
Observation of a parallel development of European welfare states and globalisation
does not prove a systematic incompatibility between them. A theoretical argument is
needed to demonstrate whether the present globalisation dilemma can be resolved.
Stating that globalisation destabilises national welfare states results in the obligation
to show how globalisation affects welfare states. Generally speaking, welfare states
are stable if a balance exists between the resources they can attract and the demands
they have to cope with. Their resources consist of contributions and/or taxes. The
demands on them are a result of the level of social political payments and the number
of contingencies for which they are responsible. The question of how globalisation
affects national welfare states can be split into two more concrete questions
(Ganßmann, 2000). Is globalisation likely to erode the material basis of national
welfare states? Is globalisation likely to cause additional social problems for national
welfare states?
In answer to the first question, generally speaking, participation in the globalisation
process triggers economic growth. At least, that is the basic argument for globalisation.
It can, therefore, be concluded, ceteris paribus, that, in the course of globalisation, the
yield from taxes and contributions will increase in a given country. The objection can
be raised that this ceteris paribus assumption is unrealistic. It might be stated that
national governments are forced by economic globalisation to reduce taxes and
contributions. This is a common objection, especially with regard to theses cases
where the lion’s share of taxes and contributions is closely linked with wages, which
create high non-wage labour costs and, thereby, damage international
competitiveness, compared to low-wage economies.
This objection is dubious in a twofold sense. Firstly, the problem of competition
between high and low-wage economies only exists at a very low level. This is because
globalisation almost exclusively affects the rich high-wage economies. The
overwhelming share of foreign direct investment flows go from high-wage economies
into high-wage economies. Moreover, firms are currently more and more reluctant to
invest in cheaper world regions, which causes serious damage to regions that can offer
cheap labour power but do not offer sufficient non-monetary conditions of production.
This applies to several of the successor states of the USSR and, even more so, for
Africa. High productivity in high-wage economies by far compensates for the high wage
and wage-related costs. When costs per unit are compared, which is what counts,
high-wage economies can readily compete.
Cross-National Research Papers 7 (1), November 2003
European Research Centre
Conceptualising the Impact of Economic Globalisation 15
Taking Germany as an example, plans to reduce the burden of taxes and
contributions to improve international competitiveness have failed, but this failure by no
means results in a failure in exports. Germany’s and Austria’s wage and non-wage
labour costs are high, but in recent years their labour costs per unit have decreased
steadily, hence securing their international competitiveness.
All in all, globalisation has very little impact on the resources of national welfare
states. However, problems may arise due to political misperceptions of the impact of
globalisation. This situation is difficult to distinguish from the possibility that politicians
are pursuing special interests against welfare states by alleging coercion caused by
globalisation.
Secondly, is globalisation likely to cause additional social problems that are the
responsibility of the welfare state? The most expensive risks covered by modern
welfare states – old age pensions and health security – develop almost independently
from economic globalisation. At least in Germany, liberal-conservative discourse
against the welfare state has shifted from globalisation to the ageing society as the
main threat for the welfare state, which can be seen as an implicit acknowledgement of
the minor impact of globalisation on European welfare states. On the contrary,
globalisation has a direct impact on labour markets, hence affecting unemployment
insurance systems. This consideration demonstrates the restricted realm of possible
consequences of globalisation for national welfare state expenditure.
Changes in export/import relations as well as foreign direct investments are likely to
trigger changes in the international division of labour, which might have an impact on
national labour markets, because of changes in the demand for labour. In addition,
changes in the supply side of the labour market might be caused by transnational
migration. Both effects are likely to cause additional unemployment, which may be
transitory or permanent.
At this stage of the argument, it becomes clear that the labour market is the link
between globalisation and welfare states. The impact of globalisation on welfare states
operates via national labour markets. Following public discussion of international
competitiveness and the threat of job losses due to high overall labour costs,
globalisation might be expected to manifest its impact on high wage economies, in
particular in the EU, by reducing the number of jobs. Surprisingly, since the 1980s,
growth rates of employment in all EU member states, Japan, Switzerland and the US
are positive. In most countries, the development of the number of people in
employment shows some dents, but everywhere employment in 2002 was higher than
in 1985. These data hardly fit with predictions (and fears) concerning the relationship
between globalisation and the threat of national labour markets. It may be that, under
the surface of these aggregated data, structural changes are taking place, which cause
sectoral job losses. Rapid changes in the international division of labour may be a
primary cause for shrinking labour demand in several sectors of the economy in
mature capitalist economies. Even if the level of total labour demand remains stable or
is rising, globalisation may lead to irreversible job losses in several branches. This
takes us back to the two crucial types of globalisation credos: short-term losers who
are long-term winners and short and long-term losers.
Bridging and compensating
At least in the short run, political decisions are at the root of participation in the
globalisation process. The acceptance of such decisions crucially depends on the way
Cross-National Research Papers 7 (1), November 2003
European Research Centre
16 Georg Vobruba
potential losers are dealt with within globalisation and their political veto power. On the
one hand, the welfare state can support participation in the globalisation process, but
on the other, globalisation does not support the stability of welfare states. This is
precisely the globalisation dilemma: globalisation requires backing by the welfare state
at the same time as it imposes burdens on it. This dilemma is by no means unsolvable.
Normally, the negative impact of globalisation on national welfare states is grossly
overestimated. Globalisation hardly affects the resources of welfare states. Its negative
impact is concentrated on social problems related to labour markets: financial room for
manoeuvre and a limited increase in socio-political problems.
With regard to the two types of losers from globalisation – short-term losers who
become long-term winners and short-term and long-term losers – the following
distinction can be made between two basic types of welfare state strategies: bridging
involves maintaining labour power for re-entry into the labour market and qualifying for
it; compensating means offering alternatives to the labour market, which may result in
unrestricted access to social transfers, access to income from capital, or both.
With respect to bridging, among the losers in the globalisation process are many
unemployed people, who can realistically expect future opportunities in the labour
market. In these cases, socio-political measures are appropriate to maintain readiness
for employment and support the ability to work. In terms of globalisation credos, social
payments that secure the status of income, support willingness to work and offer
further training are more or less adequate for short-term losers who are long-term
winners. In other words, wage-labour centred social policy deals with this type of
problem.
With respect to compensation, all those who are short and long-term losers bear the
lion’s share of the social costs of globalisation. If it is true that participating in
globalisation generally causes gains in welfare, but parts of the population are
excluded from direct access to these gains via the labour market, then other
mechanisms are required to give them a share of welfare gains. As argued above, this
is not just a question of passionate interest, but it could turn out to be a precondition for
the acceptance and feasibility of globalisation.
All kinds of wage-labour centred social policy that keep people in a waiting position
near the labour market are not appropriate for the short and long-term losers in
globalisation. It does not make sense to force permanently excluded people to orient
themselves towards dependent work. It is important to offer them alternatives to the
labour market. Thus, the question about other income sources and how to regulate and
further them politically becomes relevant. In modern societies, entirely based on
money, a limited number of sources of income are available. Agriculture has lost its
function as an autonomous source of income and as a possibility of retreat for the
unemployed. Worldwide rapid urbanisation is destroying the basis for all sorts of
income in kind. Three sources of income in cash remain: the labour market, capital and
the welfare state. Different income mixes can also be imagined (Vobruba, 1998),
composed of these three types of income. Income from capital as well as payments
from the welfare state can be seen as compensation for loss of wages caused by
globalisation. The idea of compensating the losers within globalisation through the
welfare state refers to the basic income discussion, especially to the idea of a negative
income tax, which enables legal combinations of socio-political payments with other
kinds of income. Political support for capital incomes as a compensation refers to the
idea of a ‘share economy’ (Meade, 1986), which might be adopted in the discourse on
Cross-National Research Papers 7 (1), November 2003
European Research Centre
Conceptualising the Impact of Economic Globalisation 17
globalisation. The underlying consideration is that gains caused by globalisation that
emerge as profits should be distributed by enlarged participation in capital earnings,
hence compensating at least in part for the loss of wages.
To summarise the analytical results of my thoughts, seven deficits of the
globalisation debate can be identified: perceiving globalisation as a totally new and
historically unique phenomenon; understanding globalisation as a sort of material
constraint instead of dealing with it as triggered politically; perceiving globalisation as
an irreversible process; overlooking the social and political preconditions of
globalisation; attributing all kinds of globalisation to effects that are caused by
economic globalisation; taking globalisation literally instead of pointing at its selectivity;
and approaching globalisation in an objectivistic way instead of dealing with it as a
practical social construction.
Within the last decade, the public discourse on globalisation experienced far more
rapid developments than did its subject. This fact alone indicates that social sciences
must pay more attention to the public understanding and use of terms like
‘globalisation’ and ‘the global market’ (Jordan, 1998, p. 9). However, it is important to
be aware that, in one sense, the peculiar ways of understanding globalisation are also
an aspect of globalisation itself: it is not globalisation as a pure fact (factum brutum) but
its concrete perception that triggers political reactions. This requirement fits with
general contemporary efforts to develop a sociology of political knowledge.
The policy perspective
Reference to the political perspective requires a change in the level of discourse. It is
no longer about second order observation but about the attempt to use findings from
second order observation to intervene in the practical construction of globalisation.
Globalisation and national welfare states can be seen as mutually supportive.
Globalisation yields additional economic growth, and hence compatibility with the
welfare state must be a matter of distribution. Social policy paves the way for public
acceptance and for the success of globalisation under democratic roles. Consequently,
by providing national welfare states with adequate financial resources, globalisation
secures its own sustainability.
However, this relationship also has the potential to operate the other way around: If
relevant actors think that globalisation will destroy the welfare state, then it can have
this effect. Welfare state retrenchment, publicly justified by globalisation, is likely to
lead to resistance against globalisation, diminishing its economic potential, thereby
creating reasons for further cutbacks. In this case, globalisation really endangers
national welfare states. But then, as argued in this paper, globalisation is also
endangered.
References
Abrahamson, P. (2000) ‘Futures of the European social model’, University of
Copenhagen: Unpublished manuscript.
Borchardt, K. (2001) ‘Globalisierung in historischer Perspektive’, Sitzungsberichte.
Philosophisch-historische Klasse, München: Verlag der Bayerischen Akademie der
Wissenschaften.
Borchert, J. (1995) Die konservative Transformation des Wohlfahrtsstaates, Frankfurt:
Campus.
Cross-National Research Papers 7 (1), November 2003
European Research Centre
18 Georg Vobruba
Cerny, P.G. (1996) ‘What next for the state?’, in E. Kofman and G. Youngs (eds),
Globalization. Theory and Practice, London, New York: Pinter, pp. 123–37.
Ganßmann, H. (2000) Politische Ökonomie des Sozialstaats, Münster: Verlag
Westfälisches Dampfboot.
Gough, I. (1997) ‘Social aspects of the European model and its economic
consequences’, in W. Beck, L. van der Maesen and A. Walker (eds), The Social
Quality of Europe, Doordrecht: Kluwer Law International, pp. 79–96.
Graham, C. (1994) Safety Nets, Politics, and the Poor: transitions to market
economies, Washington, D.C.: The Brookings Institution.
Held, D. and Koenig-Achibugi, M. (eds) (2003) Taming Globalization: frontiers of
governance, Cambridge: Polity Press.
Hirst, P. and Thompson, G. (1996) Globalization in Question, Cambridge: Polity Press.
Huf, S. (1998) Sozialstaat und Moderne. Modernisierungseffekte staatlicher
Sozialpolitik, Berlin: Duncker & Humblot.
Jordan, B. (1998) The New Politics of Welfare, London: Sage.
Kant, I. (1912–23) ‘Idee zu einer allgemeinen Geschichte in weltbürgerlicher Absicht’,
Akademie-Ausgabe, Bd. VIII, Berlin: Walter de Gruyter.
Meade, J. (1986) Different Forms of Share Economy, London: Public Policy Centre.
Rieger, E. and Leibfried, S. (2003) Limits to Globalization: welfare states and the world
market, Cambridge: Cambridge University Press.
Robertson, R. (2003) The Three Waves of Globalization, London, New York: Zed
Books.
Rodrik, D. (1997) Has Globalization gone too far?, Washington, D.C.: Institute for
International Economics.
Rosenberg, H. (1967) Große Depression und Bismarckzeit, Frankfurt: Ullstein.
Schmidt, V.A. (2002) The Futures of European Capitalism, Oxford: Oxford University
Press.
Seeleib-Kaiser, M. (2001) Globalisierung und Sozialpolitik. Ein Vergleich der Diskurse
und Wohlfahrtssysteme in Deutschland, Japan und den USA, Frankfurt: Campus.
Seeleib-Kaiser, M. (2002) ‘Globalization, political discourse, and welfare systems in a
comparative perspective: Germany, Japan and the USA’, Czech Soziological
Review, 38 (6), 749–70.
Therborn, G. (2001) ‘Globalization and inequality. Issues of conceptualization and
explanation’, Soziale Welt, 52 (4), 449–76.
Ullmann, H-P. (1988) Interessenverbände in Deutschland, Frankfurt: Suhrkamp.
Vobruba, G. (1998) ‘Income mixes. Work and income after full employment’, Crime,
Law and Social Change, 29 (2), 67–78.
Vobruba, G. (2001) Integration + Erweiterung. Europa im Globalisierungsdilemma,
Wien: Passagen.
Vobruba, G. (2003, forthcoming) ‘Welfare states within the globalization dilemma: the
US and the European social model in comparison’, in D. Pieters (ed.), European
Social Security and Global Politics, Den Haag: Kluwer Law International.
Wade, R.H. (2003) ‘The disturbing rise in poverty and inequality: is it all a big lie?’, in
D. Held and M. Koenig-Archibugi (eds), Taming Globalization, Cambridge: Polity
Press, pp. 18–46.
Weiss, L. (1998) The Myth of the Powerless State, Ithaka, N.Y.: Cornell University
Press.
Wilding, P. (1997) ‘Globalization, regionalism and social policy, Social Policy and
Administration, 31 (4), 410–28.
Zürn, M. (2003) ‚Wohlfahrtspolitik im Zeitalter der Globalisierung – the new politics of
intervention’, in J. Allmendinger (ed.), Entstaatlichung und soziale Sicherheit.
Verhandlungen des 31. Kongresses der deutschen Gesellschaft für Soziologie in
Leipzig, Opladen: Leske + Budrich.
Cross-National Research Papers 7 (1), November 2003
European Research Centre
The Transferability of Welfare Models between East and West 19
3. The Transferability of Welfare Models
between East and West
Nick Manning
This paper explores some of the classic questions that the collapse of state socialism
has posed for the understanding of macro change in European societies, including how
the societies of Central and Eastern Europe have diverged in their development since
1990, and why. In particular, it asks whether there has been diversity from a common
origin, or path dependency from diverse origins, and analyses the models that are
emerging in Eastern Europe. It examines the difficulty in determining whether such
general comparisons hold right across a society, or even across its welfare system,
and to what extent particular welfare areas affect the argument. Examples are drawn
from case studies, panel surveys, omnibus survey, and the UNICEF monitoring project.
Each approach is shown to have its strengths and weaknesses, but together they can
offer a multi-method basis for identifying the main contours of welfare change, and the
social issues with which they have to grapple. The pattern of change is analysed with
reference to actor-network theory and policy networks across two welfare areas,
pensions and healthcare, as they have developed in different countries. An alternative
approach is suggested involving study of the extent to which changes are consistent
across social groups, by looking at the interests of women and children as they have
been affected by changing policies.
This paper examines welfare and welfare state change in Central and Eastern Europe
(CEE), including Russia, since 1990, and considers the extent to which change arises
from the adoption of models from western Europe and the international policy
community. State socialist societies had a distinct and internally consistent approach to
welfare issues, warranting the attribution of a particular type of welfare regime, which
could be set alongside the better known types of western welfare states. In common
with west European societies, social policy was dovetailed with labour policies,
enabling adequate investment in the reproduction, maintenance and motivation of
human capital for the economy, while social needs and problems were addressed
sufficiently for political legitimacy to be retained for the most part.
Much has changed since the communist parties lost control of the central European
societies in 1989, and eventually the Soviet Union in 1991. The initial effect was
political. Social movements and civil unrest had been growing throughout the late
1980s, and early elections were seen as the primary target of those (mainly middle
class) citizens who yearned for greater political freedom. This was rapidly followed by
the informal and formal growth of markets for consumer goods, and eventually for
money, industry and services. New actors appeared in these arenas. For example,
many of the green movements that had been allowed, and in some cases encouraged,
to form in the 1980s gave important experience to the younger generation in selforganisation and political mobilisation. A great many of these activists swapped
institutional politics for movement activism once the opportunities presented
themselves (Lang-Pickvance et al., 1997). The new markets were rapidly populated by
criminals, displaced academics and, not least, re-invented members of the
Cross-National Research Papers 7 (1), November 2003
European Research Centre
20 Nick Manning
nomenklatura, who had lost their positions of power with the collapse of the communist
parties.
However, the forces driving such changes from both inside and outside the region
were not particularly concerned, either personally or in principle, with meeting social
need. On the whole, the majority of the new actors were men. A particular kind of state
socialist gender equality has been de-institutionalised, and women have had to
continue to cope with the double burdens of paid work and family responsibilities that
had been a mark of state socialism, but under more trying circumstances (Pascall and
Manning, 2000). Social needs and the social policies designed to meet them have not
been a priority in the new societies, while social and health problems have
mushroomed. Poverty and inequality, infectious diseases and alcoholism, and
homelessness have all risen sharply, while life expectancy, employment rates and
population size have declined (UNICEF, 1999).
Diversity and path dependence
One of the classic questions that the collapse of state socialism has posed for the
understanding of macro change in European societies is that of how the CEE societies
have diverged in their development since 1990, and why. So far as social policy is
concerned, three phases can be identified. Initially, some rapidly implemented policies
were put in place by the new governments in anticipation of the social consequences
of the emergence of market mechanisms in the post-communist era. New schemes for
fairly generous unemployment benefits were enacted in most countries, including
Russia. Otherwise, social policy changed little prior to the round of new elections that
had taken place by the very early 1990s.
With the new governments, most of which were characterised more by their
distance from the communist parties than internal coherence or social rootedness, new
social policy debates began to emerge in phase two, producing a more complex
picture of change. First, unemployment benefits were cut back, as an unsustainable
expense. Second, the key policy actors engaged in thinking about policy changes were
involved in different policy networks. For some, such as the visegrad countries, the
prospect of emulating the European Union, both in terms of living standards, and
political and economic security, led to discussions about devising either social
democratic or corporatist welfare systems. For others, and in particular Russia, the
heavy hand of the International Monetary Fund (IMF) made loans and credits
dependent on following a liberal ideology in which an American-style residual welfare
state was paramount.
The third phase was marked in 1998 by two key turning points: the return of five
Central European countries (CEEurope) to levels of economic production that they had
enjoyed in 1989, and, in marked contrast, the further lurching collapse of the Russian
currency, with a related and sudden jump in rates of poverty, inequality, inflation and
unemployment. Divergence was here revealed in all its clarity.
These patterns may be evidence of diversity from a common origin, or path
dependency from diverse origins. Path dependency has been the subject of wideranging multi-disciplinary reflection (Goldstone, 1998), and is generally used to explain
stability in systems where relatively unique initial conditions fix developments despite
changing circumstances. Typically, path dependency posits some kind of institutional
lock-in of actors’ behaviours, for example through resource dependency, cultural
Cross-National Research Papers 7 (1), November 2003
European Research Centre
The Transferability of Welfare Models between East and West 21
habits, or costly alternatives. Walter Korpi (2000) has explored these effects on west
European social policy: the survival of the ‘Scandinavian model’, despite the pressures
of global financial flows or EU membership, suggests such path constraints, just as
does the recent resistance of the German policy community to substantial changes in
German welfare arrangements.
The regions and countries of state socialist Europe undoubtedly contained longstanding variations that Russification, the Warsaw Pact and COMECON had been
unable to eliminate. In a sense, three path dependencies can be identified. On the one
hand, all these countries were recognisably part of the same economic and social
system, epitomised visually by the common pattern of state socialist urban
development and infrastructure that developed in the middle of the twentieth century.
However, the policy constraints that operated from the USSR for 50 years were in the
end too weak to contain the second path dependency, namely the desire by local elites
for autonomy and freedom to take their own developmental paths. This they have
done, despite the existence of a third set of path constraints provided by two sources:
the ambition of some to join the EU club, including its social dimension, on the one
hand; and the neo-liberal policy solutions proffered and often formally required in return
for help from the IMF and the World Bank, on the other (Deacon, 2000). Evidence for a
third potential source of path constraint, the economic pressures of global economic
forces independent of political forces, is not widely supported empirically or
theoretically (Alber and Standing, 2000).
A number of typologies that have emerged in the literature for grouping together the
various paths that the 27 countries in Eastern Europe have begun to travel,
summarised in Table 3.1.
The economic situation of these countries is highly varied. Nevertheless, a clear
pattern has emerged (Manning, 2001). The EU accession group is marked by a return
to growth, less poverty (although not necessarily low unemployment), lower rates of
teenage pregnancy and lower rates of infectious diseases. This group might be
characterised as the ‘recovery group’, in which economic growth has returned,
governments have the capacity to tax and spend for social intervention, and social
costs have been contained. At the other end of the scale, in what might be called the
‘disintegrating group’, are the Central Asian and Caucasus countries (and regions of
Russia in Northern Caucasus). They are typically exhibiting very high rates of poverty,
growing levels of infectious disease, extremely low levels of government expenditure
as a proportion of GDP, a return to traditional patterns of marriage, and economies
that, for the most part, have failed to return to a vigorous pattern of growth. In between
these two extremes are a variety of countries struggling with different problems. Two
types can be distinguished. Those in which conflict has disrupted economic and social
life to such an extent that it is difficult to identify a stable trend in terms of social costs
and their amelioration. The Balkans and Caucasus areas might be included here. A
final group covers countries in which economic growth has only just materialised,
where, as a consequence, a large section of the population is suffering, but in which
every potential exists for a better future in terms of available raw materials and levels
of education. This group is ‘struggling’ and may or may not join the EU accession
pattern in the future. The pre-eminent case is, of course, Russia, highly significant for
the region as a whole because of its overwhelming size. Where countries are large,
internal regional differentiation is growing fast, as is also most obviously the case of
Cross-National Research Papers 7 (1), November 2003
European Research Centre
22 Nick Manning
Russia. Diversity there surely is. How and why this has developed remains a contested
issue.
Methodological issues
The difficulty with such general comparisons is whether they hold right across a
society, or even across its welfare system, knowing what is being compared, and to
what extent the particular welfare area being examined affects the argument. Following
the critiques that have been mounted against Gøsta Esping-Andersen’s 1990 regime
classification, heavily based on the interests of working age men, by those who claim
that it does not adequately capture the experiences of women (for example Lewis,
1992), it follows that it may also be unsuitable for ethnic minorities, older people, sick
Table 3.1 Typologies of social policy and reform in CEE countries, 1995–2000
World Bank
Most reform
Some reform
Less reform
Laggards (no reform)
UN Development Programme
Liberal approach
Late reformers
Non-liberal
Conflict over whether to liberalise
Political breakdown
Poland, Slovenia, Hungary, Croatia, Macedonia,
Czech and Slovak Republics
Estonia, Lithuania, Bulgaria, Latvia, Albania,
Romania
Kyrgistan, Russia, Moldova, Armenia, Georgia,
Kazakstan
Uzbekistan, Ukraine, Belarus, Azerbaijan,
Tajikistan, Turkistan
Poland, Czech Republic, Hungary, Baltics
Bulgaria, Romania
Belarus
Russia, Ukraine, Slovakia
Armenia, Albania
European Bank for Reconstruction and Development
‘Transition indicator’ *
3.4
Central Europe
3.2
Baltics
2.4
Western CIS
2.2
Central Asia
Deacon
West European welfare state (mixed
Bismarck Insurance, e.g. payroll
taxes, and Scandinavian state
finance)
Conserve state & workplace benefits
(which may collapse and lead to
residualisation)
Czech republic, Hungary, Poland, Estonia, Slovenia
Russia, Bulgaria, Romania, Macedonia
* EBRD composite judgement of economic and political reform along 8 dimensions: 1 indicates
no change, and 4+ indicates a level typical for ‘advanced industrial economies’ (EBRD, 1999,
p.25). Thus 3.4 suggests a level of reform that brings a country close to economic and political
circumstances typical of western Europe; whereas, comparatively, 2.4 suggests a
considerable distance.
Sources: World Bank, 1996; EBRD, 1999; UNDP, 1999; Deacon, 2000.
Cross-National Research Papers 7 (1), November 2003
European Research Centre
The Transferability of Welfare Models between East and West 23
and disabled people, and so on, for ‘the discriminating properties of generalised
models of welfare regimes are now being more and more questioned’ (Lewis, 1998, p.
20). Some of the interests of these groups may be located within the kind of services
they need, for example healthcare, and some located within the characteristics of
people themselves. For example Jens Alber and Guy Standing (2000) acknowledge
that, in assessing the range of national strategies that might have been influenced by
‘social dumping’, considerable differences can be found between labour issues and
social service issues. Similarly, domestic politics surrounding the expansion or
contraction of social provision is known to be heavily affected by whether a service is
widely used and supported, such as healthcare, or targeted on a smaller section of the
population, such as income support, with a smaller interest base. Anneli Anttonen and
Jorma Sipilä (1996) found that, in considering the social care of children and older
people, welfare regime types were at variance with those derived for income support.
Indeed, Victor Pestoff (1996) argued that it was better to classify social policy changes
in CEEurope by service than by country, suggesting, for example, that it made more
sense to distinguish between services where change had been rapid (unemployment)
and those where it was slow (pensions), or where services had severely deteriorated
(health and housing).
A further issue in tackling these questions is that of the methods that can be used,
and the kind of data they can generate. The literature gives examples of the whole
range of social science methods, from deep case studies using qualitative methods of
observation and unstructured interviews, to large-scale representative longitudinal
household (panel) surveys. Most methodological debates have now moved beyond the
quantitative versus qualitative argument to agree that different methods are suitable for
different questions; none is superior, but some may be more appropriate. Sharply
varied costs are attached to different methods. Reanalysing published national data is
one of the cheapest and most readily accessible forms of data. A typical example
would be the data presented by Alber and Standing (2000) to examine the question of
whether convergence is occurring among welfare states and, if so, to what extent this
could be identified over time as related to economic growth. However, as they
acknowledge, these data are themselves highly abstracted measures of the reality of
different social policies, usually confined to social security expenditures. Moreover, a
number of alternative and rival explanations can be offered as to any patterns found.
With global competition, states may cut social expenditure to lower labour costs, or
raise expenditure to protect the vulnerable. With international harmonisation, states
may learn new models and strive to raise social standards or to reduce the ‘burden of
government’. They conclude, ‘social science has difficulty in arriving at a common
interpretation of recent trends’ (Alber and Standing, 2000, p. 102).
The alternative is to collect original data for the purpose to hand. Many case studies
are available in the literature covering one or two countries, or one or two services.
Many are commissioned by international agencies, such as one of the UN bodies.
These are valuable in generating hypotheses, but are very difficult to generalise from
by way of an aggregated picture. Systematic comparative case studies of a small
group of countries, regions or cities have become more common, and are much better
at identifying unique and common dynamics and mechanisms of the way in which
social policies are evolving across the region. The only alternative beyond this is to
undertake systematic surveys of one kind or another. A few examples are given below.
Cross-National Research Papers 7 (1), November 2003
European Research Centre
24 Nick Manning
Panel surveys, in which the same households are asked questions year after year,
are extremely good at identifying change. Although western Europe now has a
household panel survey working for quite a wide range of countries, this is not the case
in CEEurope. Two panel surveys are available for Russia, one of which (the Russian
Longitudinal Monitoring Survey) has had 10 survey rounds since the early 1990s. The
data are publicly available from the University of North Carolina at Chapel Hill. The
survey has encountered some financial difficulties, however, since this kind of research
effort is expensive, and the focus has been on a range of rather general social issues.
A second example is a series of studies using four rounds of semi-qualitative
interviews with the same Russian households since 1996, designed to identify
changing social needs and household survival strategies (Manning and Tikhonova,
2003). Again finance is dependent on renewed grant funding.
Most countries support a range of repeated omnibus surveys, with a large and
representative sample of the population. The questions tend to vary, depending on the
interests of those paying for them, although where they remain constant, quasi panel
data can be constructed. Again, these surveys tend to be rather general, and are
difficult to use to address very specific issues. However Richard Rose, at the
Strathclyde Centre for the Study of Public Policy, has made creative use of a number
of these in his series of studies in CEEurope (see http://www.cspp.strath.ac.uk/ )
One final, and in the context of CEEurope, probably the most significant data
source, has been the ‘UNICEF monitoring project’. This is funded by the World Bank,
and managed by the Innocenti Research Centre in Florence. Since 1993, the project
has monitored the social needs of children and families throughout the 27 countries of
the region, to identify social policy developments, and to gather a consistent and
publicly available data source for further use. Each annual report has contained a
mixture of regular data and special in-depth studies of particular social groups or social
needs, or policy developments. The annual data sources include: an expert social
policy survey in each of the 27 countries carried out by UNICEF field officers; UN (for
example WHO), World Bank, OECD, and official government published data; and
guest expert summaries of case studies and other independently published research
material. A summary of the numerical data is provided on line free of charge as the
TransMONEE data base, the latest of which appeared in 2001 (http://www.uniceficdc.org/resources/ )
It is axiomatic for any research that the questions posed and the methods chosen
should be compatible. The questions asked in the search for patterns and causes of
welfare state change, and the consequences of global economic forces are often given
a theoretical context, which makes them almost impossible to answer effectively within
the cost and feasibility constraints that face social science research in this area. Each
approach has its strengths and weaknesses. Whether together they can offer a multimethod basis for identifying the main contours of welfare change and the social issues
with which they have to grapple remains a disputed issue.
Approaches and examples of policy studies
In view of the various points raised so far, it is appropriate that the main question, as to
whether it is possible to understand the pattern of welfare state development in
CEEurope and, in particular, whether this is the result of the adoption or rejection of
western European models should be tackled through the examination of specific parts
Cross-National Research Papers 7 (1), November 2003
European Research Centre
The Transferability of Welfare Models between East and West 25
of the welfare state and specific social groups. For reasons of space, this paper can
only touch on the kind of work that can be done; a full-scale analysis would be a major
research project in its own right. Two options appear to be available: to examine either
policy variation or the circumstances of different social groups.
A useful approach is to ask relevant officials why they have made the policy
decisions that they have. Little research in the literature reports on senior policy actor
interviews. However, Manning et al. (2000) did interview officials, and carried out
repeat interviews after 12 months, addressing the issue of employment and
unemployment policy in three cities in Russia in the late 1990s. They found that the
policy actors in Russia were painfully unaware of the policy options that they faced,
and unschooled in the social policy traditions that are so familiar in the West.
The concepts of path dependency and epistemic policy communities, which have
become popular in the international relations field, have parallels in sociology and
political science – actor-network theory and policy networks – and provide a useful
analytical framework for studying policy variation in CEEurope.
ACTOR NETWORKS
The actor-networks approach had its origins in science and technology studies in the
early 1980s (Law and Hassard, 1999). It focused on the way in which people acted on
their interests, and the processes by which they brought elements of the material world
together in pursuit of a strategy or goal. In other words, the focus was on the process
involved, rather than the starting points. In particular, it included the notion of the way
in which material, technical or information systems were constituted out of the
embedded labour or social relations from previous rounds of scientific or technological
development.
Originating in France, this was presented as a sociology of ‘translation’, in which the
key focus was on the way in which social action and material and technical elements
were brought together, or translated, into a coherent network, out of which certain
achievements were attained. In particular, all elements were seen as capable of
‘action’, not merely the human actors in the network. Thus, in two well-known studies,
scallops, in relation to French fishermen and restaurants (Callon, 1986), and boats, in
relation to Portuguese maritime exploration (Law, 1987), were as important as the
human actors in the story.
This approach furnishes a distinct set of researchable questions, many of which can
be considered in thinking about European social policy development. Some of the
possibilities are as follows:
What are the kind of heterogeneous bits and pieces created or mobilised and juxtaposed
to generate organisational effects? How are resistances overcome? How it is (if at all)
that the material durability and transportability necessary to the organisational patterning
of social relations are achieved? What are the strategies being performed throughout the
networks of the social as a part of this? How far do they spread? How widely are they
performed? How do they interact? How it is (if at all) that organisational calculation is
attempted? How (if at all) are the results of that calculation translated into action? How is
it (if at all) that the heterogeneous bits and pieces that make up organisation generate an
asymmetrical relationship between periphery and centre? How is it, in other words, that a
centre may come to speak for and profit from the efforts of what has been turned into a
periphery? (Law, 1992, p. 390)
Cross-National Research Papers 7 (1), November 2003
European Research Centre
26 Nick Manning
POLICY NETWORKS
This approach had its origins in studies of British government structures and dynamics,
also in the early 1980s. A critical issue that emerged was the question of what the
nature of these policy worlds was, who was in them, and particularly the way they
operated, what interests were pursued, what mechanisms connected the actors, to
what extent they varied in relation to the nature of the policy areas under consideration,
for example industrial, health or defence policy.
The state is seen as a complex mixture of intergovernmental relations, where the
different parts are in a complex relation of ‘power/dependence’. They bargain, coerce
or ally with or against each other. In particular, the approach focuses on the resources
the different parts either wanted or possessed, and which influenced their strategies in
the political game.
Particularly in the work of Dave Marsh and Rod Rhodes (1992), this alternative
model of the British state was developed through the idea of policy networks (PN) as
an ‘organising perspective’ for undertaking a series of case studies of the way in which
the ‘differentiated polity’ engaged with different areas of policy. Marsh and Rhodes set
up a typology of PNs, ranging from, at one end, tightly knit policy communities with a
shared culture in which the key players interact frequently, the boundaries are fairly
tight, and those on the inside have distinct advantages. At the other end of this
continuum are loosely integrated issue networks, where the actors come together for
the pursuit of specific gains, but in which few long term and regular interactions or a
shared culture are found. Between these extremes are varieties of more or less
integrated PNs, which are strongly shaped by the issues and materials that are the
focus of the network’s concerns: for example health policy, engineering standards or
European agricultural support. Marsh and Rhodes suggest that the substantive
concerns of the network have a significant and possibly determinate influence on the
type of PN that develops and the policy outputs that it generates.
This approach also furnishes a distinct set of researchable questions, drawn in part
from Rod Rhodes (1997, chapter 9), and Dave Marsh and Mike Smith (2001, p. 537).
What are the interests, expectations and values of participants? What is the cultural
context of organisational and inter-organisational bargaining? What are the relative
strengths of group cohesion and the rules for action in the group/network? To what
extent are sustainable strategies developed and implemented from within the network?
Where are they developed, and how far do they spread? What are the means by which
the network judges itself, or defines progress or success? Is there a core and periphery
within the network? What are the relations between these? How do members join or
leave the network?
In a study of reforms in Russia and Latvia, Andrea Chandler (2001) argues on the
basis of interviews with key policy actors that great variations exist in pension reforms
right across the region, and that they have been driven more by politics than
international economic pressures. She notes that the Chilean system, widely touted by
international organisations such as the IMF and parts of the World Bank, have been
accepted as a good idea by some countries, particularly their ministries of finance, but
not by others. After a detailed examination of Latvia and Russia, she concludes that
Latvia adopted the internationally prescribed private multi-tier pensions system as a
way of identifying itself as a political entity, and finding a sense of independence from
its USSR past, and with an eye on shaping up for future EU membership. Russia, by
Cross-National Research Papers 7 (1), November 2003
European Research Centre
The Transferability of Welfare Models between East and West 27
contrast, she notes, has been much more suspicious of external solutions, and slow to
reform its pensions system.
Katharina Müller (2002) also offers a comparison of pensions policy in two
countries. In her study she traces through observation and interviews the development
of policy networks. She argues that, while variation has occurred in detail, most
CEEurope countries have gone down the road of privatising pensions. However, in two
exceptional cases, the Czech Republic and Slovenia (to which one might add Russia)
have rejected the neo-liberal pensions privatisation agenda adopted by the majority.
She approaches this problem of exceptionality through the use of the concept of
‘epistemic communities’ of policy actors. In particular, she observes that ministry of
finance officials form a separate community, often closely linked to international
economic advice channelled through international agencies. By contrast, ministry of
labour officials are more closely linked to domestic politicians and pressure groups.
The finance epistemic community typically gets involved with pensions reform when
debts are difficult to manage, and where external loans and help come, but with neoliberal strings attached, usually in the form of privatising the pensions system. In these
two exceptional cases, Czech and Slovene debt was at a relatively low level and,
therefore, the finance ministries were not so interested in seeking external help, nor the
possible impact of pensions on debts. In addition, in Slovenia it was particularly clear
that the key policy actors came from the ministry of labour, the trade unions and the
pensioners’ lobby, who actively rejected proposals from the World Bank. Both these
countries have opted for mainstream continental pensions systems.
Colin Lawson and Juraj Nemec (1998) present an analysis of health policy drawing
on a similar approach to Müller, although from a rational choice rather than policy
community orientation. They compare health reforms in Slovakia, the Czech Republic,
Poland and Hungary. They suggest that two types of healthcare development can be
distinguished. Poland and the Czech Republic have opted for a more decentralised
system, with a range of insurance providers, whereas Hungary and Slovakia have
retained a monopolistic state insurance system and more centralised services. Salaries
and fee-for-service remuneration methods also vary across these countries, and the
conclusion is that none of them contains a clear vision of the direction in which health
policy should travel, and that this, in all probability, reflects the fact that the policy
communities in each country on this issue are small, and have not been stimulated into
debate by a strong externally driven argument, as has been the case for pensions.
Iain McMenamin and Virpi Timonen (2002) update the situation in Poland, which
attempted a wide-ranging health reform from 2000. However, they conclude that, since
health policy continues to be driven strongly by internal, and unstable, political
currents, the implementation of the new system has been weak, with some
privatisation, continued high levels of informal payments, too many specialists, and
half-hearted attempts to get competition through a purchaser-provider split and to depoliticise independently set up health funds. The overriding impression is that, despite,
or perhaps because of, a locally focused politics of health policy, CEEurope remains
firmly within mainstream EU health policy, with most countries setting up state
controlled health insurance mechanisms, with little internal competition.
Approaches and examples of studies of social groups
An alternative way of posing the question of whether, how and why CEEuropean
countries have adopted European welfare policies is to think about the extent to which
Cross-National Research Papers 7 (1), November 2003
European Research Centre
28 Nick Manning
changes are consistent across social groups. While much comparative research uses
existing data on (mostly) male paid workers’ interests, a more revealing view can
arguably be gained by looking at other groups, for example the interests of women and
children as they have been affected by changing policies.
Gillian Pascall and Nick Manning (2000) analyse the changes in social welfare
support for women in five different roles, drawing on policy actor questionnaires
gathered by UNICEF regional staff in preparation for the report on Women in Transition
(UNICEF, 1999). The argument here is that the test of welfare policy change can be
conceptualised as the impact on the ability of women to undertake their social
functions. This study focuses more on the common experiences of CEEuropean
countries than variations between them. On the whole the questionnaires show a
weakening of support for the position of women in these roles. As paid workers, while
the pay gap has not changed much, women are more likely to experience
unemployment. As partners/wives, they retain strong, legally enshrined rights in
marriage, but weakened reproductive rights. As mothers, they receive reduced family
allowance, nursery provision, sick child leave and parental benefits. As carers, they
have seen a general decline in health and pre-school support. And as active citizens,
they are exercising a lower profile in political roles, although some growth in social
movement activity. They conclude that current gendered welfare regimes within the EU
may be conceptualised in terms of male breadwinner/female carer (Germany, Ireland)
and dual-earner regimes (Sweden, Finland, Denmark), with the southern European
countries as distinctive in gender terms, with weak state provision and stronger
expectations of families. The gender relations of CEE are based on two earners, but
they differ from the Scandinavian models in their more extreme expectations of women
as unpaid workers. The dominance of the breadwinner model – already reduced by the
accession of Sweden and Finland – will be further reduced as CEE countries with a
longer history of high women’s employment participation join.
Turning to children, Pascall and Manning (2001) look at the possible effects on
children of EU accession by CEEuropean countries, drawing once again on UNICEF
data. They note that more Austrian and German children lived below their national
relative poverty thresholds in the early 1990s than Czech or Slovak children, and more
UK children with two parents than Hungarian or Polish children. Children of lone
parents in Poland and Hungary in the same period were not much more subject to
poverty than children of two parent families. However, Michael Förster and IstvánTóth
(2001) provide a detailed review of the impact of changing family income support
policies in the CEEuropean countries enacted in 1995, particularly the general move to
income testing and targeting, and demonstrate from survey data that more children
have been precipitated into poverty by these changes. Sarah Jarvis and Gerry
Redmond (1997) suggest that, while levels of child poverty vary, policy changes for
child poverty reduction are similar, with a general move from a more continental to an
Anglo-Saxon type.
The impact of methods on findings
In this paper, it has been suggested that an answer to the question of social policy
change in CEEurope and, in particular, its convergence or divergence in relation to
western Europe is heavily dependent on the methodology employed, and the data
collected and analysed. In the case of Russia, as we have observed, probably more
Cross-National Research Papers 7 (1), November 2003
European Research Centre
The Transferability of Welfare Models between East and West 29
variation exists within the country than between Russia and other countries. The size
of a country may, therefore, be critical to this kind of analysis. In addition, the length of
time over which historical patterns can cast a shadow may vary by country, by culture,
by policy area, by social group, and so on. Path dependencies will be multiple in terms
of size, direction, scope and length.
A fundamental question such as disentangling the effects of Europeanisation or
globalisation is thus difficult to answer. Market imperatives, and the way they are
filtered through institutional structures and networks, combined with the advice of
international agencies, such as the IMF and World Bank, have resulted in a variety of
studies and a complex debate, which is to a certain extent shaped by different
concepts, methods and foci. In a recent special edition of Global Social Policy, focused
on Europeanisation, globalisation and social policy, Michelle Beyeler (2003) separates
economic from political pressures and logics, and also the rational actor viewpoint from
that of institutional cultures and traditions. The impact of path dependency and
epistemic policy communities has been considered in this paper. It is not always easy
to know what is rational in any particular circumstance. Alber and Standing (2000)
observe that it may be as rational for a country to lower labour and social costs in a
‘race to the bottom’ in the face of economic competition, as it is for them to raise social
and labour standards in a ‘race to the top’ in the face of political competition. Even the
‘bottom’ and the ‘top’ will mean very different things for different social groups, or
different strata in a society depending on its level of inequality.
References
Alber, J. and Standing, G. (2000) ‘Social dumping, catch-up or convergence? Europe
in a comparative global context’, Journal of European Social Policy, 10 (2), 99–119.
Antonnen, A. and Sipilä, J. (1996) ‘European social care services: is it possible to
identify models?’, Journal of European Social Policy, 6 (2), 87–100.
Beyeler, M. (2003) ‘Globalization, Europeanization and domestic welfare state reforms
– new institutionalist concepts’, Global Social Policy, 3 (2), 153–72.
Callon, M. (1986) ‘Some elements of a sociology of translation: domestication of the
scallops and the fishermen of St Brieuc Bay’, in J. Law (ed.), Power, Action and
Belief: a new sociology of knowledge?, London: Routledge and Kegan Paul, pp.
196–233
Chandler, A. (2001) ‘Globalisation, social welfare reform and democratic identity in
Russia and other post-communist countries’, Global Social Policy, 1 (3), 310–37.
Deacon, B. (2000) ‘Eastern European welfare states: the impact of the politics of
globalisation’, Journal of European Social Policy, 10 (2), 146–61.
EBRD (1999) Transition Report 1999, London: European Bank for Reconstruction and
Development.
Förster, M. and Tóth, I. (2001) ‘Child poverty and family transfers in the Czech
Republic, Hungary and Poland’, Journal of European Social Policy, 11 (4), 324–41.
Goldstone, J. (1998) ‘Initial conditions, general laws, path dependence, and
explanation in historical sociology’, American Journal of Sociology, 104 (3), 829–45.
Jarvis, S. and Redmond, G. (1997) ‘Welfare state regimes and child poverty in the UK
and Hungary’, Journal of European Social Policy, 7 (4), 275–90.
Korpi, W. (2000) ‘Contentious institutions: an augmented rational-actor analysis of the
origins and path dependency of welfare state institutions in the western countries’,
SOFI Working Paper 4/2000, Stockholm: Swedish Institute for Social Research.
Lang-Pickvance, K., Manning, N. and Pickvance, C. (eds) (1997) Environmental and
Housing Movements: grassroots experience in Hungary, Russia and Estonia,
Dartmouth: Avebury.
Cross-National Research Papers 7 (1), November 2003
European Research Centre
30 Nick Manning
Law, J. (1987) ‘Technology and heterogeneous engineering: the case of Portuguese
expansion’, in W.E Bijker, T.P Hughes and T.J. Pinch (eds), The Social
Construction of Technological Systems: new directions in the sociology and history
of technology, London: MIT Press, pp. 111–34.
Law, J. (1992) ‘Notes on the theory of the actor-network: ordering, strategy, and
heterogeneity’, Systems Practice, no 5, 379–93.
Law, J. and Hassard, J. (eds) (1999) Actor Network Theory and After, Oxford:
Blackwell Publishers.
Lawson, C. and Nemec, J. (1998) ‘Central European health reform: the case of
Slovakia, 1990–7’, Journal of European Social Policy, 8 (3), 237–52.
Lewis, J. (1992) ‘Gender and the development of welfare regimes’, Journal of
European Social Policy, 2 (3), 159–73.
Lewis, J. (1998) Social Care, Gender and Welfare State Restructuring, Aldershot:
Ashgate.
McMenamin, I. and Timonen, V. (2002) ‘Poland’s health reform: politics, markets and
informal payments’, Journal of Social Policy, 31 (1), 103–16.
Manning, N. (2001) ‘Copenhagen + 5: what should be done about the transition in
Eastern Europe?’, Social Policy Review, Policy Press, pp. 133–56.
Manning, N., Shkaratan, O. and Tikhonova, N. (2000) Work and Welfare in the New
Russia, Aldershot: Ashgate.
Manning, N. and Tikhonova, N. (eds) (2003) Poverty and Social Exclusion in the New
Russia, Aldershot: Ashgate.
Marsh, D. and Rhodes, R.A.W. (1992) Policy Networks in British Government, Oxford:
Oxford University Press.
Marsh, D. and Smith, M.J. (2001) ‘There is more than one way to do political science:
on different ways to study policy networks’, Political Studies, vol 49, 528–41.
Müller, K. (2002) ‘Beyond privatisation: pension reform in the Czech Republic and
Slovenia’, Journal of European Social Policy, 12 (4), 293–306.
Pascall, J. and Manning, N. (2000) ‘Gender and social policy: comparing welfare states
in Central and Eastern Europe and the former Soviet Union’, Journal of European
Social Policy, 10 (3), 240–66.
Pascall, J. and Manning, N. (2001) ‘Social Europe East and West’, in M. and H.
Ingham (eds), EU Expansion to the East, Cheltenham: Edward Elgar, pp. 134–62.
Pestoff, V. (1996) ‘Reforming social services in post-communist Europe’, in J.L.
Campbell and O.K. Pedersen (eds), Legacies of Change: transformation of
postcommunist European economies, New York: Aldine de Gruyter, pp. 57–86.
Rhodes, R.A.W. (1997) Understanding Governance, Policy Networks, Governance,
Reflexivity and Accountability, Buckingham: Open University Press.
UNDP (1999) Human Development Report for Central and Eastern Europe and the
CIS, New York: UNDP.
UNDP Regional Bureau for Europe and the CIS (1999) Central Asia 2010: prospects
for human development, UNDP: New York.
UNICEF (1999) Women in Transition, Florence: UNICEF Innocenti Research Centre.
World Bank (1996) From Plan to Market: World Development Report 1996,
Washington DC: World Bank.
Cross-National Research Papers 7 (1), November 2003
European Research Centre
Methodological and Conceptual Issues in Researching the OMC 31
4. Methodological and Conceptual Issues in
Researching the Open Method of Co-ordination
Milena Büchs
This paper is concerned with methodological and conceptual issues that arise in
research into the impact of the Open Method of Co-ordination on national policy
making, as exemplified by the European Employment Strategy. Germany and the UK
have been selected as case study countries to compare and contrast the role of the
EES in the development of labour market policies, because of their different
institutional backgrounds and approaches to employment policy. The paper examines
responses to the EES and the opportunities the OMC affords for policy learning and
transfer among member states. The conceptual approach adopted in the paper is to
confront two models of analysis. The first attempts to theorise the functioning of the
OMC with reference to concepts such as policy learning, diffusion, shaming, networks
and deliberation, as proposed by David and Louise Trubek. The second, the
institutionalist approach, concentrates on path dependency and policy legacies to
explain obstacles to convergence and to analyse country-specific ways of
implementing international policies. The paper specifies the levels at which
convergence might be possible, while also identifying the mechanisms whereby the
OMC may promote or constrain convergence.
The aim of the research on which this paper is based was to examine the influence of
the European Employment Strategy (EES) on labour market policies in Germany and
the United Kingdom. The research is examining whether the Open Method of Coordination (OMC) is effective as a tool for achieving the aims of the EES, while also
looking at how the example of the EES has contributed to the development of the OMC
and its acceptance in other policy areas. The paper begins by reviewing the application
of the OMC in the EES and sets out the rationale for the Anglo-German comparison of
the impact of the EES on national policy making, in general, and on labour market
policies, in particular. The second section presents the conceptual and theoretical
underpinnings of the methodology adopted in the analysis, before going on to identify
both the limits of the case study approach and the insights that it may provide for
researchers and policy makers.
The OMC as applied to the EES
The EES was launched at the Luxembourg Council in 1997 and has its legal base in
the Treaty of Amsterdam. The EES applies the OMC, a term denoting a method for
setting common standards and objectives, and for monitoring and comparing the
fulfilment of these objectives in various policy fields at EU level. At the Lisbon Council
in 2000, the decision was taken to use methods similar to the EES in policies designed
to promote social inclusion, and the term ‘Open Method of Co-ordination’ was officially
introduced1. In 2001, the OMC was applied in the fields of pension and health policy.
The general aim of the OMC is to agree common objectives at EU level that are not
legally binding, and to support the convergence of policy objectives and policy
outcomes, while respecting national diversity in policy approaches and institutional
settings.
Cross-National Research Papers 7 (1), November 2003
European Research Centre
32 Milena Büchs
The concrete procedures and instruments of the OMC differ across the various
policy fields where it has been applied. In the case of the EES, employment guidelines
and quantitative indicators are agreed at EU level, and member states are required to
draw up National Action Plans (NAPs) describing the measures taken to meet EU
objectives. The Council and Commission then produce a Joint Employment Report,
which compares and benchmarks the labour market performance and fulfilment of the
objectives by member states. The Council and Commission also have the power to
direct recommendations at individual member states, requiring them to address any
deficiencies identified in their performance.
Between 1998 and 2002, this procedure took place every year. From 2003, the
employment guidelines have been issued together with broad economic guidelines and
will be held stable for three years. At the same time, the number of guidelines is being
reduced by half (Communication of the European Commission on the future of the
EES, COM(2003) 6 final, 14.01.2003). Since 1999, a peer review programme takes
place, at which the host country presents individual policy initiatives to a small number
of other member states. Approaches to policy problems are compared, and issues of
transferability are discussed.
In addition to the obligation laid down in the Treaty of Amsterdam to establish NAPs
for employment, the EES consists of informal policy instruments, such as
benchmarking and shaming, that are intended to have an impact on labour market
policies and outcomes. The OMC was developed in response to a dilemma in
European social policy. Following the completion of the Single Market, and the
establishment of Economic and Monetary Union and the Growth and Stability Pact, it
was acknowledged by governments in member states that a common strategy at EU
level was required to deal with social issues. It was also clear that agreement on
binding instruments at EU level was not in sight. The OMC is intended to fill this policy
gap by increasing employment rates, making labour markets more inclusive and
creating more equitable social conditions across member states.
Methodological issues in researching the OMC
The aim of the research on which this paper is based is to contribute to a better
understanding of the impact the OMC has on social policy making in member states
and its consequences for future European social policy. In considering the possible
impacts of the OMC on social policy making, the aspects that might be affected,
include policy-making processes, broad policy concepts, concrete programmes and
initiatives, as well as procedures for implementing and evaluating policies, and policy
outcomes.
A number of fundamental and general methodological problems arise in attempting
to track and produce proof of the influence of the OMC on domestic policies and policy
outcomes. Firstly, most OMC and EES objectives are very broadly couched and are
not intended to guide the development of actual policy measures, which means they
cannot be used to implement concrete measures. OMC/EES objectives may, therefore,
have a greater influence on terminology and broad conceptual arguments in support of
policy change than on specific policy measures.
Secondly, it is debatable whether it is possible to observe any influence that the
OMC may have on policy making or policy measures. Political actors may not
necessarily choose to refer to such influences publicly, for instance in draft laws,
Cross-National Research Papers 7 (1), November 2003
European Research Centre
Methodological and Conceptual Issues in Researching the OMC 33
parliamentary discussion papers, statutory documents, green and white papers, and
other governmental and party publications. If a proposed policy reform is widely
accepted domestically, policy actors may have little incentive to make reference to
EES guidelines or to policies in other member states in their policy statements. They
are more likely to want to present the initiative as being their own. If, however, they are
having difficulty in gaining support for a particular reform, they may find it
advantageous to refer to the requirement to adapt policies in compliance with EES
guidelines, or they may want to cite examples of successful policy initiatives in other
EU member states to justify their own policy stance, even though the reform was not
originally motivated by the OMC. The presence or otherwise of references to the EES
does not, therefore, allow conclusions to be drawn about the influence or effectiveness
of the OMC.
Thirdly, even if the OMC plays a part in the formulation of policy measures, it will not
be the only factor behind policy reform, because changes in policy are always related
to a variety of internal and external influences, including domestic politics and actor
constellations, the economic situation and international rules, such as EU directives.
For all these reasons, it is difficult to isolate the impact of soft instruments, such as
the OMC, on labour market policies and outcomes from other factors and, even more
so, to prove any kind of influence on policy change. Furthermore, if outcome data do
point to a positive statistical correlation between the introduction of the OMC and
particular labour market indicators, showing convergence towards EU targets, they do
not provide information about how the OMC is operating at domestic level.
The aim or research into the impact of the OMS on national policy making,
therefore, needs to be the opening up of this ‘black box’, by seeking to describe and
analyse the process of policy development in selected policy fields. The approach
adopted in the present study is to try and learn more about the role the OMC plays in
the policy process by examining its role in labour market policy in two EU member
states. The task is to identify the policy actors involved in drawing up the NAPs, the
contribution they make to the process, whether they establish new relationships as a
result of the OMC and, consequently, change the policy-making process. The
assumption is that the OMC will be more influential in policy planning and making if
policy actors are aware of its objectives and are actively taking account of it in course
of their work.
Case studies are being used to provide a framework for understanding how the
OMC works. They are based on a comparative analysis of the institutional, economic
and political backgrounds of selected countries, complemented by in-depth interviews
with labour market policy experts, actors involved in the process of drawing up the
NAPs, participants in EU-peer reviews and EU officials. The comparative approach
enables the researcher to try and make sense of similarities and differences in
preconditions and outcomes and draw preliminary conclusions about the features that
need to be explored in more depth. A study limited to two countries does not, however,
allow the testing of hypotheses about the wider European context. To do so, it would
be necessary to include all member states and to construct indicators for measuring
the influence of the OMC, which would be difficult given that the influence is likely to
vary from country to country. In a two-country study, it is not appropriate to apply a
‘most different’ or ‘most similar systems design’, because such designs are usually
used to extract the most important similarity as a independent variable accounting for
Cross-National Research Papers 7 (1), November 2003
European Research Centre
34 Milena Büchs
the same outcome in otherwise different cases, or for the most important difference,
which accounts for differences in outcomes for otherwise similar cases.
Similarities and differences do not just exist or emerge. Rather, they have to be
defined on the basis of conceptual work prior to the selection of the cases. Germany
and the United Kingdom were selected for an in-depth comparison, because, on the
one hand, they differ considerably in their economic and labour market situations,
institutional backgrounds and current approaches to labour market policies. On the
other, both saw a shift in government, to ‘New Centre’ and ‘New Labour in 1998 and
1997 respectively, at the time when the EES was being introduced. These differences
and similarities provide an interesting constellation of factors for comparing the process
when the NAPs were being drawn up and for estimating the impact of the EES on
policy concepts and policies. The policy exchanges between the two countries and with
EU institutions in the areas of labour market and social policies are also of interest
from a comparative perspective.
To counterbalance the limitations of studying only two member states, aggregated
labour market and economic performance statistics are being examined for all member
states, and also at regional level, providing an overview of general developments since
the EES was launched. It is not regarded as a means of demonstrating the success or
failure of the EES, because any convergence or divergence observed cannot
necessarily be attributed to the EES. Where outcomes converge, factors other than the
existence of the EES may produce the same result. Where outcomes diverge, it does
not necessarily mean that the EES has not had an influence on policy making in
member states. Rather, it may indicate that policies have either not been implemented
effectively, or that they were not appropriate for achieving their objectives.
Conceptualising and theorising the EES
A central assumption in the research is that the EES does not, most probably, have a
direct influence on policy concepts, policy programmes, administration, institutions and
political culture. Since the EES instruments are informal, and no hard sanctions are
threatened in cases of failure to meet the objectives set, it is unlikely that policy
reforms are undertaken primarily because of the existence of the EES. It does,
however, seem probable that the EES can play a catalysing role in the policy process,
because it provides arguments for actors who are engaged in reforms that are in line
with the EES. Furthermore, the EES may be expected to have an influence on policies
at the cognitive level, for example on the language used by political actors, and on
policy concepts and philosophies rather than on concrete policy programmes. Whether
these ideas are also transferred into policy programmes is a secondary issue, since it
is more difficult to achieve the political consensus and resources they require than it is
to enact ‘symbolic politics’. For policy ideas to be transferred into programmes, it is
necessary to know how they have been interpreted, because the use of similar terms
and policy labels may conceal substantial differences in the policies actually
implemented.
DEFINING ‘INFLUENCE’
The term ‘influence’ is central to the research. It can take on a number of different
meanings. In the generic sense, influence means that A has the power to change B, as
applied, for example, to processes in organisations, preferences or the behaviour of
Cross-National Research Papers 7 (1), November 2003
European Research Centre
Methodological and Conceptual Issues in Researching the OMC 35
actors. The changes that take place would not come about without this influence
(causal or direct) or would not have happened in the same way (partial or catalysing
influence). With regard to the EES, three types of influence can be distinguished:
direct, concealed and catalysing.
Direct influence is used in the research to refer to cases where the existence of the
EES guidelines, indicators and recommendations is the (main) reason for policy
makers changing their minds or introducing new policy programmes. This role of the
EES would then appear in the policy process, because policy makers refer to the EES
when giving reasons for reforms. As mentioned above, policy makers may refer to the
EES in the policy process, but this does not necessarily mean that the EES was the
only or the main reason for policy reforms. Rather, it may have provided welcome and
useful arguments for policy makers to legitimise reforms that might not be very popular.
Concealed influence refers to cases where the EES had an influence on the
perceptions and assessments of policy makers with regard to current policies, policy
concepts, the use of language and other changes in the policy process. It can include
attitudes to evaluation from other countries or international bodies such as the EU, and
the proliferation and distribution of information, as well as in the search for information.
It is conceivable that the EES, and the OMC in general, have had a concealed or
obscured influence on these cognitive and procedural aspects and that policy actors do
not refer to the EES and OMC when discussing proposals for policy reforms. Actors
may simply not be aware of an external influence, or it may not seem important or
useful for them to refer to it when changes are widely accepted. Such influences may
also be difficult to locate and identify. For researchers attempting to disentangle a
variety of influential streams and interdependencies, concealed influences create an
insoluble problem.
The catalysing influence of the EES refers to cases in which the EES functioned as
an additional factor to support developments that were already taking place for other
reasons. A catalysing effect of the EES may be either apparent in the policy process or
concealed.
CONCEPTUALISING THE FUNCTIONING OF THE OMC
In the growing literature on the OMC, various concepts have been put forward for
analysing its possible influence of the policies of member states. David and Louise
Trubek (2003) have proposed a list of concepts that are relevant to the functioning of
the OMC, including diffusion, shaming, networks, deliberation, and learning. They
argue that these concepts need not be regarded as mutually exclusive, since the OMC
itself consists of different instruments that can function in a variety of ways, although
they differ in several respects. Some concepts focus on bottom-up processes and
voluntarism, such as learning and deliberation, while others stress top-down
mechanisms and (soft) coercion, such as diffusion processes (Trubek and Trubek,
2003, p. 18). Concepts may also differ in their interpretation of EU integration and the
role of EU institutions, national and subnational levels in the process.
Diffusion is a concept that seeks to explain conditions and patterns for the adoption
of particular policies. It has been conceptualised as a quasi-natural process. The
spread of policies is explained by evolutionary patterns of economic and technical
development and/or by processes resulting from dependencies between entities within
hierarchical systems (Katz, 1964; Walker, 1969; Gray, 1973; Berry and Berry 1990). If
Cross-National Research Papers 7 (1), November 2003
European Research Centre
36 Milena Büchs
the OMC is theorised in terms of the diffusion approach, the adoption of standards and
policies can be explained by functional and spill-over processes due to the
interdependency of member states. Processes may also come into play that enable the
spreading of ideas and concepts as a result of the powerful position occupied by the
European Commission in the EU architecture and informal hierarchies among the
member states, similar to the spread of fashions and opinions in groups through social
leadership (Katz, 1964).
The concept of shaming has its origins in the socio-legal literature. Shaming is
regarded as a soft social sanction. The threat of being shamed is an incentive to
comply with rules and standards to avoid being shamed publicly. In the case of the
EES, an element of shaming is found in the Council’s and Commission’s procedure for
comparing and ranking labour market performance publicly (Trubek and Mosher, 2003,
p. 39). If the EES functions through shaming, the influence of the EES has to be
explained by the incentive for member states to adopt policies that are in line with the
guidelines and the recommendations or are thought to increase labour market
performance to avoid being shamed by EU institutions.
Networking, as applied to the analysis of the EU (and other international
organisations) focuses on the influence of (international) policy networks on (domestic)
policy making. Although a broad variety of network approaches exists (Börzel, 1997),
their advocates stress that regular interaction between actors and exchange of
information and ideas lead to a common pool of information and knowledge and, in the
end, to a consensus about policy objectives, interpretations of political problems and
the instruments that should be used to carry out these tasks (Kohler-Koch, 2001, p. 5).
Members of a network become bound into this common frame and, thus, ideas and
policy concepts adopted in the network are transferred into the domestic policy arena,
and are more likely to be implemented than if the network did not exist. Network
approaches may, however, differ regarding the understanding of power relationships
within them. In some cases, networks may be conceptualised as non-hierarchical
systems (Börzel, 1997). In others, they may be seen as including asymmetrical power
relationships, where the more powerful members of the network, for example the EU
commission or particular member states, use instruments such as persuasion to make
other members agree to standards or policies (Kohler-Koch, 2001).
The OMC can be analysed according to one or other of these different network
approaches. In the first case, knowledge and ideas would diffuse in a top-down
direction, because of the strong role played by the European Commission in EU-level
networks (Jacobbson, 2002). The second approach would support the view that policy
networks, including a broad range of stakeholders at various policy levels, especially at
the local and regional level, foster bottom-up experimentation and policy learning
(Trubek and Trubek, 2003, p. 20).
The concept of deliberation to which Trubek and Trubek refer is based on the work
of the ‘directly deliberative democracy school’ (Cohen and Sabel, 2003). Accordingly,
deliberation takes place in non-hierarchical and open groups consisting of a variety of
actors, and it is oriented towards the solution of practical problems. Such groups can
appear at all political levels. At the local and regional level, experimental policy
solutions can be tested. To explain the functioning of the OMC, the authors describe
the example of the EU structural funds, where information about local projects is
passed on to higher political levels, other member states and the EU for monitoring
purposes. These processes of bottom-up experimentation and exchange of information
Cross-National Research Papers 7 (1), November 2003
European Research Centre
Methodological and Conceptual Issues in Researching the OMC 37
are believed to enhance opportunities for policy exchange and learning (Cohen and
Sabel, 2003, pp. 364–6).
Policy learning is a related concept that does not necessarily deal with learning from
abroad, but more generally with different kinds of domestic policy changes (Hall, 1993).
Thus, using the concept of policy learning for the analysis of the functioning of the
OMC means exploring the potential of the OMC for fostering learning from abroad.
Many authors interested in knowing which features of the OMC might promote policy
learning stress its benchmarking elements. They appear to be most important because
the constant comparison through mutual surveillance and in relation to EU wide targets
is regarded as being able to disturb former certainties of domestic actors, enhance
competition among member states and facilitate the use of information about best
practice (Trubek and Mosher, 2003; De la Porte et al., 2001).
Lesson drawing refers to the process of collecting information about policy
programmes from foreign countries by policy makers and drawing conclusions from the
exercise (Robertson, 1991; Rose, 1991). Lessons can be positive in the sense that
they can lead to positive decisions to undertake a reform in the home country. A lesson
can, however, also be negative, indicating what should not be done and learning from
mistakes abroad (Rose, 1991, p. 4; Dolowitz and Marsh, 1996, p. 350). Positive
lessons can be brought about to various degrees by copying, emulation, hybridisation,
synthesis or simply inspiration from political programmes from abroad (Rose, 1991, p.
22). Lesson drawing is regarded as a conscious and voluntary process and, therefore,
as largely dependent on the political situation and conditions in the home country.
Conceptualising the functioning of the OMC in terms of lesson drawing would mean
that the OMC is seen as providing better opportunities for lesson drawing by enabling
broader access to information and knowledge about policies from other countries, and
the continuous comparison and evaluation of policy programmes.
The concept of policy transfer concentrates on processes and conditions of transfer
of policy goals, structures and content, policy instruments, administrative techniques,
institutions, ideology, ideas, attitudes and concepts (Bennet, 1991; Wolman, 1992;
Dolowitz and Marsh, 1996, 2000; Wolman and Page, 2002). The OMC can be seen as
creating a framework that is conducive to policy transfer because it provides a wide
range of opportunities to exchange experience with other member states as well as
pressures to adopt best practice. Yet, if the main characteristic of the OMC is seen as
fostering policy transfer, the conditions for transfer and the type of transfer need to be
specified. Policy transfer can be regarded as either voluntary or coercive (Dolowitz and
Marsh, 1996, p. 344). Whether policy transfer through the OMC is voluntary or coercive
will also depend on whether the OMC is seen as exerting informal coercion on member
states, or whether they retain the power to decide how they respond to the OMC.
Many authors writing on policy learning, policy transfer or lesson drawing point out
that the starting point for transfer is primarily related to the level of dissatisfaction with
the current political situation, which creates pressure for change. Richard Rose (1991,
pp. 8–9) argues that an international ranking of country performances might bring
about dissatisfaction and prompt the search for more successful policies abroad. This
leads to the question whether the OMC processes of public comparison and policy
evaluation are able to create dissatisfaction with current policies to such an extent that
interest and willingness to engage in lesson drawing and policy transfer are increased.
In addition to these approaches, which concentrate on the explanation of policy
change and, particularly, the role of cross-national policy transfer in policy change, it is
Cross-National Research Papers 7 (1), November 2003
European Research Centre
38 Milena Büchs
useful to consider the application of institution theory. In the institutionalist literature,
issues such as institutional change and change of policies within particular institutional
contexts have been addressed (North, 1990; Thelen and Steinmo, 1992; Hall and
Taylor, 1996). Thus, institution theory should not be seen as contradicting theories on
policy change and policy learning. While the latter body of theory aims to systematise
the processes and circumstances in which policy transfer and policy learning occur,
institution theory focuses on the role of country-specific institutional arrangements in
policy development and institutional change. The concept of path dependency
suggests that policy change is undertaken by political actors who operate in a context
of institutions and policy legacies, which provide constraints and incentives for change.
Institution theory also conceptualises radical institutional change, which means that the
concept of third-order learning and an institutionalist approach are not, in general,
contradictory, although they concentrate on different aspects.
Applying the institutionalist approach to theorising the functioning of the OMC
means focusing on the conditions of cross-national policy learning and policy transfer
and the effectiveness of soft EU rules and policy objectives. Such an approach implies
that it is a voluntary act to comply with soft law, to achieve benchmarks and policy
objectives, and to participate in peer review exercises with other member states. This
means that decisions about policy reform and the adjustment of policies in member
states to EU objectives, or the adoption of policy initiatives from other member states
are taken at national level and, thus, depend on political processes within countries.
The account taken by policy actors of EU objectives and the best practices on other
member states is not ruled out, but the important point is that this may not be the case
to the same extent in all the policy areas covered by the EES. Policy exchange and
policy transfer are more likely between member states with similar backgrounds and
close relationships. The way in which EU objectives are taken into account and policy
initiatives from other member states are adopted or mimicked is not random. This
means that it is important to integrate the institutional background and policy legacies
into the analysis of the influence of the OMC on the policies of member states, and
also to pay attention to institutional backgrounds, current political situations and actor
constellations to explain country-specific responses to the OMC.
As argued by Trubek and Trubek, some of these concepts can be considered as
complementing one another in explaining the functioning of the OMC. Areas may exist
where interdependence between member states is regarded as high and where nonfulfilment of EU objectives and the consequences of shaming are stronger incentives to
develop strategies than in other fields. Explanations of the influence of the OMC can
be modelled according to the shaming concept. In other areas covered by the OMC
where policy making is seen as a domestic prerogative, and in which the influence of
the EU or other member states is rejected, better explanations may be found by
applying models of voluntary lesson drawing, policy transfer or policy learning.
Hypotheses on the OMC at work
Overall, the concepts of policy networks and diffusion do not appear to be very useful
in theorising the functioning of the OMC because they suggest that the OMC will have
similar effects in all member states and that convergence of policy outcomes will
ultimately ensue. The hypothesis being developed in the research is rather that the
OMC will not bring about the convergence of policy outcomes and policy concepts
Cross-National Research Papers 7 (1), November 2003
European Research Centre
Methodological and Conceptual Issues in Researching the OMC 39
beyond the symbolic level, and that it is more useful to combine institution theory with
the concepts of lesson drawing, policy transfer and policy learning to identify the role of
the OMC in policy change and differences in responses to the OMC among member
states. This is in line with the assumption that labour market policies are a field where
intergovernmentalism continues to prevail. It also corresponds to a conception of EES
and OMC soft law as relatively weak rules that do not have the strength of other types
of informal rules derived from regular practices and common consensus among actors.
The critical question of whether the decisions of national governments and parliaments
would not have been reached without the existence of the OMC or EES might not
produce many examples according to this argument. It is more likely that change is
driven by other forces, which are embedded in domestic political, economic, and
institutional backgrounds.
Developments in member states may, however, be accelerated and shaped by EES
processes. Some aspects of the political process do, for example, change due to the
EES process of regular monitoring and evaluation of labour market policy outcomes.
The exposure of domestic processes to the scrutiny of the EU and other member
states may create a framework conducive to policy development. An important task of
the research is to identify the cases where this applies and where it does not.
The guidelines and recommendations of the EES provide a common language for
labour market policies. A number of OMC analysts have noted that a common use of
terms and policy ideas can be observed across member states. This process may
have the negative outcome of limiting the autonomy of member states in the design
and presentation of policies. More positively, the OMC may have already provided a
framework for an emerging EU-wide consensus on social policy concepts and
principles – how these concepts are assessed politically is another question – even
though the terms used may not be interpreted in the same way and do not eliminate
national specificity. A direct influence of the EES and OMC on labour market and social
policies is regarded as unlikely, and the transfer of particular policy initiatives depends
heavily on institutional and political similarities between states. Nevertheless, the EES
and OMC processes are delivering new resources for policy evaluation, monitoring and
access to information about experience with policy initiatives in other member states.
They may, therefore, be changing the framework for labour market and social policy
making in a subtle way.
The Anglo-German comparative case studies may be expected to contribute to a
better understanding of the influence of the OMC on national policy development by
making these processes transparent and by situating the perspectives of actors in
relation to economic, political and social circumstances, institutional background and
policy legacies. They may also help to explain why particular policy approaches have
not been adopted, and why others have been promoted, and show how EU incentives
and internal pressures are together leading to the developments observed. This kind of
knowledge limits the danger of drawing inappropriate conclusions and making
misleading policy recommendations. It can provide a basis for a thorough analysis of
failure and can point to the institutional arrangements that should be given priority in
any policy reform.
1. In the area of EU economic policy co-ordination, mechanisms similar to the OMC were
introduced in 1993. Plans to establish an EES had been in existence since the Essen
Council in 1994. After the introduction of the EES at the Luxembourg Council, co-ordination
mechanisms in the fields of internal market policies (Cardiff process, 1998) and for macro-
Cross-National Research Papers 7 (1), November 2003
European Research Centre
40 Milena Büchs
economic policies (Cologne process, 1999) were established. The current praxis of the OMC
is based on these early mechanisms. Since the official launch of the OMC in 2000, the
method has also been introduced in other policy fields such as education, research,
immigration, sustainable development, entrepreneurship and enlargement. In these areas,
however, no National Action Plan procedures or regular mechanisms exist for setting
objectives comparable to the Broad Economic Guidelines or the EES.
References
Bennett, C.J. (1991) ‘How states utilize foreign evidence’, Journal of Public Policy, 11
(1), 31–54.
Berry, F.S. and Berry, W.D. (1990) ‘State lottery adoptions as policy innovations: an
event history analysis’, American Political Science Review, 84 (2), 395–415.
Börzel, T.A. (1997) ‘What’s so special about policy networks? An exploration of the
concept and its usefulness in studying European governance’, European Integration
Online Papers, 1 (16). http://eiop.or.at/eiop/
Cohen, J. and Sabel, C.F. (2003) ‘Sovereignty and solidarity: EU and US’, in J. Zeitlin
and D.M. Trubek (eds), Governing Work and Welfare in a New Economy: European
and American experiments, Oxford/New York: Oxford University Press, pp. 345–75.
Collier, D. and Messick, R.E. (1975) ‘Prerequisites versus diffusion: testing alternative
explanations of social security adoption’, American Political Science Review, 69 (4),
1299–315.
De la Porte, C., Pochet, P. and Room, G. (2001) ‘Social benchmarking, policy-making
and new governance in the EU’, Journal of European Social Policy, 11 (4), 291–
301.
Dolowitz, D. and Marsh, D. (1996) ‘Who learns what from whom: a review of the policy
transfer literature’, Political Studies, vol. XLIV, 343–57.
Dolowitz, D.P. and Marsh, D. (2000) ‘Learning from abroad: the role of policy transfer
in contemporary policy-making’, Governance, 13 (1), 5–24.
Gray, V. (1973) ‘Innovation in the states: a diffusion study’, American Political Science
Review, 67 (4), 1174–85.
Hall, P.A. (1993) ‘Policy paradigms, social learning, and the state: the case of
economic policy making in Britain’, Comparative Politics, 25 (3), 275–96.
Hall, P.A. and Taylor, R.C.R. (1996) ‘Political science and the three new
institutionalisms’, Political Studies, 44 (5), 936–57.
Jacobsson, K. (2002) ‘Soft regulation and the subtle transformation of states: the case
of EU employment policy’, Score Research Report no 4.
Katz, E. and Lazarsfeld, P.F. (1964) Personal Influence, New York: The Free Press.
Kohler-Koch, B. (2002) ‘European networks and ideas: changing national policies?’,
European Integration Online Papers, 6 (6). http://eiop.or.at/eiop/
North, D.C. (1990) Institutions, Institutional Change and Economic Performance,
Cambridge: Cambridge University Press.
Robertson, D.B. (1991) ‘Political conflict and lesson-drawing’, Journal of Public Policy,
11 (1), 55–78.
Rose, R. (1991) ‘What is lesson-drawing?’, Journal of Public Policy, 11 (1), 3–30.
Thelen, K. and Steinmo, S. (1992) ‘Historical institutionalism in comparative politics’, in
S. Steinmo, K. Thelen and F. Longstreth (eds), Structuring Politics. Historical
Institutionalism in Comparative Analysis, Cambridge: Cambridge University Press,
pp. 1–32.
Trubek, D.M. and Mosher, J.S. (2003) ‘New governance, employment policy, and the
European social model’, in J. Zeitlin and D.M. Trubek (eds), Governing Work and
Welfare in a New Economy: European and American experiments, Oxford/New
York: Oxford University Press, pp. 33–58.
Cross-National Research Papers 7 (1), November 2003
European Research Centre
Methodological and Conceptual Issues in Researching the OMC 41
Trubek, D.M. and Trubek, L.G., (2003) ‘Hard and soft law in the construction of social
Europe’, paper presented at the SALTSA, OSE, UW workshop on ‘Opening the
Open Method of Co-ordination’, European University Institute, Florence, July 2003.
Walker, J.L. (1969) ‘The diffusion of innovations among the American states’,
American Political Science Review, 63 (3), 880–99.
Wolman, H. and Page, E. (2002) ‘Policy transfer among local governments: an
information-theory approach’, Governance, 15 (4), 477–501.
Cross-National Research Papers 7 (1), November 2003
European Research Centre
42 Denis Bouget
5. Convergence in Social Welfare Systems:
from evidence to explanations
Denis Bouget
Following the Second World War, convergence of social welfare systems was seen as
a way of achieving modernisation and technical progress. The development of social
welfare systems in Europe appears to have been the outcome of autonomous national
processes. The stimulus for a common system of social protection was linked to
European political and economic construction, with convergence as a catching-up
process in the comparative evaluation of national social policies. The paper adopts two
approaches in exploring the convergence debate. Firstly, it attempts to quantify
convergence among EU and OECD countries at the macro-economic level, using
social indicators to assess convergence or divergence of social expenditure. The
evidence of convergence is shown to be ambiguous due to a number of
methodological problems. Secondly, two main explanations of convergence are
examined: economic forces and legal frameworks. The paper shows that, even if the
maturation or reform of national social policies explains increases in social
expenditure, macro-economic pressures, or constraints (globalisation, Single Market),
on public expenditure can fuel certain type of convergence. A goal of social Europe is
to use legal frameworks to build common social rights. Convergence of national social
welfare systems can be interpreted as a component in a general process of
convergence in law between countries. However, such explanations tend to neglect
elements of divergence, thereby concealing the complexity of the process and
underestimating the full extent of divergence.
A decade after the publication of the recommendation on the convergence of social
protection objectives and policies, Gabriel Amitsis et al. (2003) announced the
renaissance of convergence as the goal for the modernisation of social welfare
systems in Europe. In their report, multidimensional convergence was conceived as an
historical outcome (convergence of the southern European model towards the
continental one), an objective and target for social policy (convergence through agreed
targets) or as a norm for action using the Open Method of Co-ordination (OMC),
combined with benchmarking. The success of the OMC as a new instrument of
governance in the EU has revamped the notion of convergence. Simultaneously, the
transfer of benchmarking to social policy has enhanced the debate on social indicators,
which become not only explanatory instruments in the evolution of societies but also, at
least in some cases, instruments for the evaluation of the ‘efficiency’ of social policy in
different countries. For instance, the proportion of GDP allocated to social expenditure
is an indicator that provides information about the empirical and quantitative
convergence of social benefits. Benchmarking has reinforced the normative
interpretation of convergence and turned it into a political instrument for evaluating
inputs and outcomes of social policies, and national efforts. Because the construction
of Europe is based on economic, social and political integration, a normative social
objective is to monitor the many differences in national and regional well-being.
Convergence in social protection has been a permanent concern of European
construction from the outset (Chassard, 2001). It is, therefore, fundamental to know
Cross-National Research Papers 7 (1), November 2003
European Research Centre
Convergence in Social Welfare Systems 43
what exactly the convergence of social welfare systems means. Is it a reality that is
empirically demonstrated? Does it mean the emergence of a new way of life in
Europe? Is it something recurring in the dreams of European citizens, a new European
ideology, perhaps, or a more global phenomenon?
The paper begins by briefly describing quantitative empirical findings that show
convergence in social expenditure. They analysed in terms of a multidimensional
system of factors or causes, including economic domains, socio-demographic trends,
institutional and cultural factors. Explanations of convergence tend to underestimates
the factors that restrain the trend towards convergence, and which create divergence
among the richest nations. The paper comments on the shortcomings, ambiguities and
contradictions in the most common justifications for convergence.
Empirical evidence and factors in convergence
Empirical evidence for convergence in social welfare systems encompasses several
types of analysis: convergence in social indicators between countries, convergence in
economic variables, convergence in rules and social rights and convergence in social
institutions. The paper is confined to a quantitative analysis of economic variables,
involving comparisons of social expenditure between countries.
Two main social indicators are used in quantitative comparative analysis of the
trend towards convergence of social welfare systems (Alonso et al., 1998; Herce et al.,
1998; Cornelisse and Goudswaard, 2001; Lopez et al., 2001): per capita social
expenditure and the proportion of GDP devoted to social expenditure, based here on
OECD social indicators of ‘gross’ public social expenditure between 1980 and 1998
(Adema, 1999). The 21 countries for which data are available include 14 of the 15 EU
member states (except Austria) and several other OECD countries (Australia, Canada,
Japan, New Zealand, Switzerland, Turkey, United States). Convergence or divergence
is measured using an indicator of disparity between countries: convergence is
indicated by a reduction in disparity and divergence by an increase in the index.
Convergence in per capita social expenditure is assessed using the coefficient of
variation (OECD, 2003). The trend in the coefficient of variation of per capita social
expenditure during the period 1980–98 shows that cross-sectional disparity in per
capita social expenditure is always lower among EU countries than among the OECD
sample, because most non-EU countries have an underdeveloped public sector and
public social protection system, as shown in Figure 5.1. Between 1980 and 1998,
despite all the reforms of national social welfare systems during the 1980s and 1990s,
the trend towards convergence in per capita social expenditure is found to be steady
and shows no significant fluctuations. Despite the effects of economic crises, per
capita public social expenditure was converging in the EU, but no clear trend could be
observed in non-EU countries. Finally, OECD countries converged mainly because of
the convergence in EU member states.
Convergence in social expenditure as a proportion of GDP is assessed by the
simple standard deviation (Micklewright and Stewart, 1999). The result is not the same
as for the previous indicator, as illustrated by Figure 5.2. Three periods must be
distinguished: convergence from 1980 to 1988, a period of divergence from 1989 to
1993 and a new period of rapid convergence since 1993. Clear convergence occurred
only in 10 years. The short period of divergence in 1990–93 was coupled with lags and
divergent reactions in countries facing international economic recession. The use of
Cross-National Research Papers 7 (1), November 2003
European Research Centre
44 Denis Bouget
Figure 5.1 Coefficient of variation of per capita social expenditure in OECD and
EU countries, 1980–98 (constant prices 1995, PPPs 1995)
Coefficient of
variation
0 .5
Non-EU c ountries
OECD
0 .4
EU c ountries
0.3
0.2
1980
1985
Years
1990
1995
Figure 5.2 Standard deviation of percentage of social expenditure in GDP in
OECD and EU countries between 1980 and 1998
Standard
deviation
8
7
OECD
6
Non-EU c ountries
5
EU c ountries
41980
1985
Years
1900
1995
Source: OECD, Social Expenditure, Database-edition, 2003.
Cross-National Research Papers 7 (1), November 2003
European Research Centre
Convergence in Social Welfare Systems 45
these two indicators thus leads to different conclusions, which can be partly explained
by methodological problems, but we also need to analyse their links with economic
developments (Bouget, 2003a).
Factors contributing to convergence
In the social sciences, convergence is defined as ‘the tendency of societies to grow
more alike, to develop similarities in structures, processes, and performance’ (Kerr et
al., 1973, p. 3). Convergence, therefore, implies that, as rich countries get richer, they
develop similar economic, political and social structures and, to some extent, common
values and beliefs (Wilensky, 2002, p. 3). Convergence also refers to a process and
outcomes. Generally speaking, the outcome is conceived as a stable situation, or one
that is static or dynamic but lacking uncertainty. It can be a utopia (‘golden age’ or a
European model), or a single national social system, which becomes a model for other
countries. In this case, convergence is analysed as a transitional period between the
present situation and the future model.
Many economic, socio-demographic, political, legal, institutional and ideological
factors may help to explain the process of convergence in social welfare. Most
analyses are based on a Darwinian doctrine of the evolution of society, whereby
societies that do not adopt the rules of the market-democracy-universalism of values
are not meant to survive when competing with those that do. This is an example of
Spencer’s theory of social Darwinism, which stressed the importance of the forces of
competition and selection, leading to the survival of the fittest, the ‘one best way’ in
institutions, policies and performance (Unger and van Waarden, 1995). Whatever the
strength of this type of analysis, it can be shown that not all the factors in convergence
are linked to such a doctrine.
Three main dimensions can be used to explain or justify convergence in social
welfare benefits and systems: the economic domain, socio-demographic factors and a
large set of data and values which justify the creation of policies and institutions.
Convergence between social welfare systems is often said to stem from broader
economic convergence. Some empirical studies show that cross-sectional observation
of the increasing relationship between the share of social expenditure and per capita
GDP is largely confirmed by a country’s economic evolution. Despite the period of
economic crisis or recession in the 1980s and 1990s, the long-term expansion of social
expenditure remains closely linked to economic development. The economic literature
on convergence highlights specific factors of convergence such as globalisation at
international level, a process of catching up between countries and the reduction in the
domestic budgetary deficit.
The consequences of globalisation for social welfare systems are well known (see
Vobruba in this volume). According to liberal thinking social benefits are non-wage
costs, which reduce the incentive to work at national level and jeopardise the
competitiveness of companies engaged in international trade. Therefore, international
economic and financial pressures compel states to reform their social welfare systems,
especially the most generous ones. The reforms in EU member states in the 1980s
and 1990s resulted in a significant reduction in entitlements, which has been
interpreted as a retrenchment or dismantling of the welfare state, leading to a specific
type of convergence known as ‘the race to the bottom’.
Cross-National Research Papers 7 (1), November 2003
European Research Centre
46 Denis Bouget
Another economic explanation of convergence is based on domestic, fiscal
constraint and its economic and political consequences (Pierson, 2001). Convergence
in the percentage of social expenditure in GDP is seemingly linked to macro-economic
policies in EU member states. Especially since the implementation of the Maastricht
Treaty, social protection has been considered as a financial burden, which
simultaneously blunts the competitiveness of enterprises and fuels the potential public
deficit. Analyses of the dismantling or retrenchment of social security systems have
been implicitly based on the reduction in the public deficit and public debt. Economic
pressure arising from European construction has prompted a general macro-economic
convergence among European regions. However, the objective of European
harmonisation of taxation has been frozen due to the subsidiarity principle and the rule
of unanimity at EU level in tax-related decisions. Also, the convergence/divergence
process depends on different types of taxation and tax competition, which can
exacerbate the likelihood of competition between member states arising from fears of
mobile tax bases. Furthermore, a ‘trilemma’ between budgetary constraints, equality
and employment prevents compatibility between three objectives: budgetary balance,
employment growth and equality of incomes (Iversen and Wren, 1998).
Convergence in social protection is sometimes the result of catching up. According
to neo-classical models of economic growth, diminishing returns on capital, implicit in
the neo-classical production function, mean that the rate of return on capital and,
therefore, its growth rate will be very large when the stock of capital is small and vice
versa (Solow, 1956; Swan, 1956; Koopmans, 1965). If the only difference among
countries is their initial level of capital, then countries with little capital will grow faster
than rich countries with large capital stocks. Catching up also depends on
technological imitation. In the long run, the world growth rate is driven by discoveries in
state-of the-art economies. Followers converge towards the leaders because imitation
is cheaper than innovation. This theory can be extended to the domain of social
protection. As the laggards try to catch up with the innovative countries, they also
create or develop their own social welfare system. In this case, convergence in social
protection is a direct consequence of national economic growth, which makes it
possible to increase taxes and social contributions to finance social benefits. In the
1960s and 1970s, the idea of economic catching up was consistent with the
development of social welfare systems, and it generally explains the convergence of
the southern European countries toward most developed countries.
In the past, the economic development entailed the extension of the public sector
and welfare transfers. The evolution of social protection was linked to economic growth
and demographic change (Wilensky, 1975, 2002). Industrialisation brought major
changes in family size, structure and living arrangements, and produced a dominant
type in industrial society. Convergence is therefore the consequence of maturation in
the developed societies. The core notion in convergence theory is that, as nations
achieve similar levels of economic development, they will become more alike in terms
of social, institutional and cultural aspects of social life. The development of universal
human rights has influenced the pattern of social welfare systems in many
democracies. All national social welfare systems were created with reference to
universal values. Convergence comes not only from common values (universalism) but
also from a common culture and knowledge associated with the extension of secular
behaviour, the selective process of societies and bounded rationality, which tend to
generate a belief in man’s ability to achieve progress toward a better world. Today,
Cross-National Research Papers 7 (1), November 2003
European Research Centre
Convergence in Social Welfare Systems 47
economic globalisation has embedded itself within a wider process of globalisation of
institutions, law and culture. Institutional economics and transaction cost analysis
argue that economic performance is largely dependent on efficient institutions and that
markets have to be structured by rules (Gessner, 2002). The main convergent trend in
the legal framework is linked to the Europeanisation process, the development of the
Single Market and the domestic application of international norms expressed by the
European Court of Justice. Direct and indirect EU influences have become so strong
and obvious that we live in a kind of proto-European system of social protection, in
which national social rights are gradually becoming ‘regional’ European features. This
process is apparently an element of European construction, serving as a pre-federalist
system (Théret, 2001).
Finally, convergence is based on hybridisation. Globalisation leads to a mixing of
cultures, that is a reciprocal (unequal) influence between societies through a
simultaneous process of homogenisation and inter-cultural conflicts. This process is
consistent with the possibility of ‘multiple paths of historical dependence’ (Théret,
2001). Convergence in social welfare systems in the most developed countries is one
element in a wider process of convergence among the wealthiest countries. According
to Harold Wilensky (2002, p. 70), as the rich countries became richer, they developed
a plethora of similarities, including the gradual institutionalisation of social programmes
and a low level of internal collective political violence.
Some methodological limits to interpretation
Empirical evidence of convergence and the large set of factors that work together to
produce convergence in social welfare systems seemingly lead to the conclusion that,
in the long run, disparities between countries will be reduced. This conclusion needs to
be re-visited.
Statistical analysis of trends in social expenditure provides only a modest
perspective on convergence, due to data limitations (number and type of countries,
period), quality of the aggregates (content of social expenditure) and methodology
(measurement of convergence). If the sample is extended to the less developed
countries, the conclusions are different. In the 1990s, the percentage of social
expenditure of less developed regions was very low, and dispersion of the ratio was
very large. A ‘club’ convergence of per capita GDP occurred among the richest and
poorest countries, but inequality between the two groups increased (divergences).
Some of the poorer societies decided to allocate a similar percentage of their GDP to
social security expenditure compared to that spent by richer societies. Divergence in
the economic process between the developed and less developed regions meant,
however, that the development of social security systems is not totally influenced by
economic pressure; it clearly depends on institutional factors.
The use of common measurements of disparity between countries requires
comparisons for each country in relation to a European average, which does not exist.
Comparisons cannot be made with a normative model (race to the bottom) or with a
specific country, which could be used as a general social model in Europe.
Furthermore, from a statistical point of view (Bouget, 2003b), few countries (only
Greece and Sweden) contribute to the process of convergence (decreasing variance).
A link is not made in this paper with the convergence of total social expenditure to
an aggregation of spending on different social policies for two main reasons. Firstly,
Cross-National Research Papers 7 (1), November 2003
European Research Centre
48 Denis Bouget
most European financial requirements are global, thus leaving room for a trade-off
between various social transfers (Malinvaud, 1996, p. 240). Secondly, analysis of
convergence of specific social benefits between countries must take account of the
possible phenomenon of substitution (André, 2003, p. 8).
Another methodological problem has been underlined by Peter Taylor-Gooby
(2002), who claims that quantitative approaches tend to overemphasise stability,
especially the trend in total social expenditure, just at a point when radical changes are
on the cards.
Limitations on convergence
Explanations for convergence in social welfare systems need to be re-assessed
because factors such as globalisation have various and contradictory effects for social
spending and social policies. The sensitiveness of countries varies in response to
international and domestic changes. New divergences emerge. This section examines
three factors that can hinder convergence: the heterogeneous consequences of
economic openness, national resistance and innovation.
DIFFERENTIATED EFFECTS OF GLOBALISATION
Since the late 1980s, most nations have suffered the twofold strain of slow economic
growth and a chronic budget deficits. Macro-economic pressures (with or without the
Maastricht criteria) have required social policy reforms, and these have been
converging. Convergence in specific social policies, therefore, results from the
economic pressures entailed by reforms and different types of recalibration (Ferrera
and Hemerijck, 2003). The interpretation of these reforms as a shift towards a liberal
system and downward convergence is over-simplistic. The empirical measurement of
convergence cannot confirm or contradict that convergence is a race to the bottom,
without conducting an in-depth analysis of the different effects of globalisation on
nations. There is no sign of any convergence to the bottom, because in the long term,
the developed countries have not systematically reduced the average per capita social
expenditure. Changes in benefit criteria and the significant reduction in entitlements
have not shifted the systems towards the liberal model. Only rarely have entire
programmes been abandoned or radically changed because national institutions and
electoral constraints were working against radical departures from established welfare
state models. A slight increase in macro-economic aggregates for social welfare
systems can, therefore, be observed at the same time as a reduction in social rights
(Huber and Stephens, 2001). When we investigated different social policies, we noted
that upward convergence of social benefits can also occur, especially in healthcare
(Eichener, 1995; Comas-Herrera, 1999).
Recent economic history has shown that the openness of international trade, the
dramatic post-1970s rise in international capital mobility, competitiveness and
integration of trade did not produce the same consequences everywhere. One
important outcome is that the liberal economic model, illustrated by a process of
Americanisation, does not appear to be a unique historical path because greater
openness raises the demand for social protection against the ravages of world markets
(Saari, 2001, p. 174). Therefore, tension between the pressure of international
economic norms and domestic pressure for greater social protection does not always
engender retrenchment of social welfare states. In countries that experienced a high
Cross-National Research Papers 7 (1), November 2003
European Research Centre
Convergence in Social Welfare Systems 49
fiscal deficit, international capital mobility is negatively related to social welfare effort
(Swank 2002, p.277). However, the extension of free market rules is combined with
many different institutions: co-ordination, bargaining, public influence, complex national
networks, specialisation and domestic factors. Furthermore, most benefits are nontradable. Duane Swank (2002) states that domestic political conditions – electoral
inclusiveness, social corporatism, centralisation of authority, and existing welfaresystem structures – shape the responses of democratic governments to economic
integration, spurring divergence more than convergence. As a result, globalisation can
provoke increased welfare benefits in some developed economies and retrenchment in
others, leading to divergence as well as convergence. More generally, the developed
welfare states of northern Europe were constructed in very open trade economies in
which the performance of the export sector was pivotal for the country’s economic
welfare. It is clear that export competitiveness was not the cause of retrenchment, at
least not as a direct economic constraint (Sharpf and Smith, 2000; Huber and
Stephens, 2001; Pierson 2001). The Nordic welfare states managed to absorb the
growing labour force, due to the inflow of women, by expanding public sector
employment. Smaller countries, which are exposed to a higher degree of pressure
from international competition, are likely to develop co-operative relationships between
employers, unions and governments resulting in higher levels of social protection
(Montanari, 2001, p. 471). Due to resistance against the downward harmonisation of
social benefits, which maintains differences between countries, it is conceivable that
the real tensions between globalisation and national political autonomy emphasised in
the literature have been resolved through convergence to an intermediate level of
social expenditure rather than a race to the bottom (Wolf, 2002).
Finally, an acute model of convergence is absent from social welfare domains.
Caroline De la Porte (in De la Porte and Pochet, 2002) notes that in European
economic policy, several common rules are enforced in the EU independently from the
national situation. The Single Market, the Maastricht Treaty and macro-economic
convergence criteria have created a homogeneous area of economic decisions and
policies. Exactly the opposite occurred with regard to social protection, because there
is no implicit or explicit model on which to converge, contrary to the situation with
economically oriented policies. However, the paradox is that, on the one hand, the new
system of economic policy making in Europe, which entailed the convergence of
certain economic variables (prices, budgetary deficit), did not lead to any convergence
in per capita GDP in the 1990s. On the other hand, within the domain of social welfare,
we note a European convergence, without any explicit model.
NATIONAL DIVERSITY AND PATH DEPENDENCY
Besides differentiation in the effects of globalisation and tensions between international
pressures and national decisions, domestic factors bolster diversity between nations,
such as the principle of subsidiarity, the effect of path dependency, the role of
polarisation and social fragmentation or the emergence of new social groups.
Within Europe, convergence is very often described as the route of European
construction, and many reforms or policies are based on this objective. Macroeconomic and monetary policies, structural funds to reduce regional inequalities in
Europe, attempts at tax harmonisation or the Stability and Growth Pact feature among
the economic instruments used to achieve this end. Convergence in social protection is
also listed on the European agenda, including harmonisation, convergence of
Cross-National Research Papers 7 (1), November 2003
European Research Centre
50 Denis Bouget
objectives, the principle of co-ordination, fundamental social rights and the OMC.
Despite European decisions, this type of convergence is by no means obvious given
that the principle of subsidiarity is a fundamental rule governing social protection
(Fouarge, 2004). This means that national systems of social protection remain largely
independent from European decisions, which must obey the unanimity rule in this
domain.
Subsidiarity leaves open the possibility of state intervention in appropriate areas
(notably in areas which affect equality of condition). Until the 1970s, the harmonisation
project failed to produce any results. Directives on co-ordination of social protection did
not change national systems and were confined to migrants, and the Council
recommendation on the convergence of social protection objectives and policies in
1992 did not produce any practical results in the 1990s (Quintin, 1999; Chassard,
2001; De la Porte and Pochet, 2002). Transplanting the OMC from the fields of
economics and employment to that of social inclusion is expected to produce a positive
result, but the effectiveness of soft law remains uncertain (De la Porte and Pochet,
2002). All these decisions or non-decisions at EU level have paved the way for the
theory of path dependency, which explains the modest or limited convergence of social
welfare systems in Europe (Pierson, 2001).
Public choice theory has demonstrated that this rule of collective decision-making
can be effective when applied to the distribution of goods and services but not to
income. As a consequence, any European reform in this field is impossible. However,
several economic rules are gradually influencing the development of national social
welfare schemes (competition, the four freedoms), and the rule of qualified majority
voting has been extended to certain areas of industrial relations.
In many EU member states, reforms have mainly been ‘home grown’. Major reform
initiatives are formulated by senior civil servants (Saari, 2001, p. 138). It is possible to
transfer some foreign experiences within national welfare systems (hybridisation), but it
is unlikely that a different system could be transferred to another nation. The
accumulation of new social policies, new rules and norms has not produced a
significant change in national institutions, because many reforms that are inspired by
foreign experiences have often remained compatible with national institutions. As
argued above, differences between countries are not incidental nor accidental but
structural (Unger and van Waarden, 1995), in that they are firmly embedded in local,
national and ethnic culture and history. These differences in democratic countries have
shaped national public institutions, such as legal systems and structures and traditions
of public administration. Almost all commentators accept and observe path
dependency, which signifies a non-convergent pattern of social institutions rather than
any real divergence, given that it contains the permanent presence of the past, that is
national resistance to an international convergence process. Convergence towards any
unique, democratic, politico-economic model is unlikely, both because there are strong
theoretical reasons for doubting such convergence is even functionally dictated, and
because path-dependent cognitive, institutional and political factors militate against it.
Furthermore, the pattern of convergence simultaneously becomes unstable because of
the sensitiveness to the business cycle and also a ‘more volatile politics of
representation’ (Kitschelt et al., 1999, pp. 448, 459).
Many statistics clearly show patterns of convergence in relation to social protection
among countries. However, the stability of national systems can also be noted. The
history of social welfare systems clearly proves that the threat of an Americanisation of
Cross-National Research Papers 7 (1), November 2003
European Research Centre
Convergence in Social Welfare Systems 51
European systems has largely been overestimated, at least in the short run. More
recently, Mikko Kautto (2001) has stated that, contrary to much current speculation,
there is little evidence to suggest that the Nordic welfare states are becoming
‘Europeanised’. This conclusion is based on an analysis of large-scale empirical data:
income distribution, health inequalities, gender equality and gender policies, health and
social-care services, policy reactions to family change, activation, social security,
employment policies and the financing of welfare states.
Because many European welfare states were facing similar socio-economic
challenges in the 1980s and the 1990s, policy makers were expected to develop
common response strategies. This direct link is not self-evident because, according to
Guiliano Bonoli et al. (1996), the influence of socio-economic changes on political
debates is mediated by the different institutional arrangements that distinguish
European welfare states. This differentiation is again reinforced by the principle of
subsidiarity. They conclude that common socio-economic problems do not necessarily
imply convergence in policy making.
INNOVATION AND INEQUALITY
Path dependency highlights the power of national culture and institutions and explains
resistance to convergence among nations. However, another opposing explanation
should be combined with it, largely based on innovation and its consequences. The
diffusion of new types of communication, the use of new information technology,
access to globally distributed information provides privileges for a minority of well-off
people, but it simultaneously excludes those who do not use this dominant pattern to
communicate. Access to services linked to new technologies appears to be
disproportionately concentrated among the haves, while increasingly excluding the
have-nots from any participation whatsoever.
The divergence/convergence process is linked to innovation/ generalisation in social
policies. For instance, when the first countries created a minimum income policy, this
was the start of a future general system of minimum income in the developed
countries. However, from a statistical point of view, this start was a divergent process
in comparison with the other countries (period of innovation). Therefore, convergence
only appeared during the period when minimum income was being more generally
implemented in societies (entropy principle), accompanied by a reduction in the
diversity between the countries that had implemented such a scheme and those that
had not (period of convergence). This means that innovation in some countries creates
a divergence process, while imitation creates convergence. There is a permanent
tension between the consequences of innovation as a process of differentiation and
the catching-up as a process of imitation and convergence. The new and strong
ideological reference to a ‘knowledge-based society’ in the European Union will
enhance this tension, which will produce new types of inequality within and between
countries.
Models of convergence
The convergence of social welfare systems remains a very debatable issue, involving
several theories relating to economic, social and institutional change. The first
concerns convergence and generalisation toward a liberal model, but societies share a
recent history, which shows the complexity of such an evolution. A second model of
Cross-National Research Papers 7 (1), November 2003
European Research Centre
52 Denis Bouget
convergence is linked to the gradual creation of a new system based on European
construction, which mixes divergent and convergent processes during a transitional
period, leading to a more stable system. A third theory is based on the dichotomy
between the outcomes and institutional dimensions of national social welfare systems.
From an institutional point of view, very few changes have affected national social
institutions since World War Two. As each system has developed social benefits for a
wider section of the population, greater similarity can be observed between social
benefits with stable institutions. A fourth theory states that the convergence of
outcomes is the sign of a future convergence in institutions, which will change either in
the very long run or due to a sudden historical event. The accumulation (and
adaptation) of new reforms changes institutions following sudden events. At first,
national institutions absorb and/or resist new collective international decisions. This
period is characterised by a long list of new national reforms and the emergence of
new doctrines, which appear as exogenous in the recipient country. Finally, the
permanent tension between divergence and convergence prevents a deterministic
process within modern (or post-modern) societies; past convergence does not always
lead to convergence in the future. Any study of past long-run convergence in social
welfare systems raises the question of how long the trend will continue. In fact, the risk
of a divergent period increases as convergence continues. Convergent countries
automatically become increasingly sensitive to any domestic or international changes.
These tensions again raise the question: are we really observing convergence in
individual social rights between developed countries? Statistical studies often conclude
that social expenditure is converging. However, knowledge about the convergence of
the rules governing social policies is not well advanced. The gradual shift from a
society based on industry to a knowledge-based society has produced a new ideology
about current social welfare systems. This ideology tends to enhance new principles of
an enabling state, which can produce divergence at the international level and new
types of inequalities at the domestic level; for instance a new type of deprivation
among unskilled people. It is difficult to conceive of future accumulation of similar
social policies in Europe without any adaptation in institutions. Any such change could
appear as a political and institutional crisis, which would gradually produce a new type
of society.
National social welfare states remain the outcome of implicit or explicit negotiations
between social or political groups, the result of ‘social dialogue’, political alliances,
social conflicts and other factors that are often analysed as national forces of
resistance against a potential global convergence. Within this context, what will be the
consequences of domestic reforms, leading to decentralisation, on the one hand, and a
permanent process of Europeanisation, on the other. Both are forces that may weaken
the power of social welfare states at national level. As Peter Taylor-Gooby (2003, p.
554) has said: ‘Pressures for both liberalism and or a stronger interventionist role exist,
and whether the balance between the two will shift in the future is at present unclear.’
References
Adema, W. (1999) Net Total Social Expenditure, Paris: OECD.
Alonso, J., Galindo, M.A. and Sosvilla-Rivero, S. (1998) ‘Convergence in social
protection benefits across EU countries, Applied Economics Letters, vol. 5, 153–5.
Cross-National Research Papers 7 (1), November 2003
European Research Centre
Convergence in Social Welfare Systems 53
Amitsis, G., Berghman, J., Hemerijck, A., Sakellaropoulos, T., Stergiou, A. and
Stevens, Y. (2003) ‘Connecting welfare diversity within the European Social model’,
report, Athens: Ministry of Labour and Social Security.
André, C. (2003) ‘Ten European systems of social protection: an ambiguous
convergence’, in D. Pieters (eds), European Social Security and Global Politics, The
Hague: Kluwer Law International, pp. 3–44.
Bonoli, G., George, V. and Taylor-Gooby, P. (1996) ‘Politics against convergence?
Current trends in European social policy’, Swiss Political Science Review, 2 (3), 1–
18.
Bouget, D. (2003a) ‘Convergence in social welfare systems: what does it mean?,
Social Policy Review, vol. 15, 91–110.
Bouget, D. (2003b) ‘Convergence in the social welfare systems in Europe: from goal to
reality’, Social Policy and Administration, 37 (6), 674–93.
Chassard, Y. (2001) ‘European integration and social protection: from the Spaak report
to the open method of co-ordination’, in D.G. Mayes, J. Bergman and R. Salais (eds),
Social Exclusion and European Policy, Cheltenham: Edward Elgar, pp. 277–305.
Comas-Herrera, A. (1999) ‘Is there convergence in the health expenditure of the EU
member states?’, in J. Legrand, Health Care and Cost Containment in the European
Union, London: Ashgate, pp. 197–215.
Cornelisse, P.A. and Goudswaard, K.P. (2001) ‘On the convergence of social
protection systems in the European Union’, International Social Security Review, vol
5, 3–17.
De la Porte and Pochet, P. (eds) (2002) Building Social Europe through the Open
Method of Co-ordination, Brussels: Peter Lang.
Eichener, V. (1995) ‘European Health and Safety Regulation: No race to the Bottom’,
in B. Unger and F. van Waarden, Convergence or Diversity? Internationalisation and
economic policy response, Aldershot: Avebury, pp. 29–52.
Ferrera, M. and Hemerijck, A. (2003) ‘Recalibrating Europe’s welfare regimes’, in J.
Zeitlin and D. Trubek (eds), Governing Work and Welfare in a New Economy, Oxford:
Oxford University Press, pp. 88–128.
Fouarge, D. (2004) Economic Analysis of Minimum Protection: poverty and subsidiarity
in Europe, Cheltenham: Edward Elgar.
Gessner, V. (2002) ‘Legalism in the era of globalisation’, in R. Appelbaum, W. Felstiner
and V. Gessner (eds), Rules and Networks: the legal culture of global business
transactions, Oxford: Hart Publishing, pp. 63–85.
Herce, J.A., Sosvilla-Rivero, S. and De Lucio, J.J. (1998) ‘Social protection benefits
and growth: evidence from the European Union’, FEDEA, Documento de Trabajo.
Huber, E. and Stephens, J.D. (2001) ‘Welfare and production regimes in the era of
retrenchment’, in P. Pierson (ed.), The New Politics of the Welfare State, Oxford,
Oxford University Press, pp. 74–104.
Iversen, T. and Wren, A. (1998) ‘Equality, employment and budgetary restraint of the
service economy’, World Politics, n° 50, 507–46.
Kautto, M. (2001) ‘Moving closer? Diversity and convergence in financing of welfare
states’, in M. Kautto, J. Fritzell, B. Hvinden, J. Kvist and H. Uusitalo (eds), Nordic
Welfare States in the European Context, London: Routledge, pp. 232–61.
Kerr, C., Dunlop, J.T., Harbison, F. and Myers, C.A. (1973) Industrialism and Industial
Man: the problems of labour and the management of economic growth, Cambridge
Mass.: Harvard University Press.
Kitschelt, H., Lange, P., Marks, G. and Stephens, J.D. (eds) (1999) Continuity and
Change in Contemporary Capitalism, Cambridge, Cambridge University Press.
Koopmans, T. (1965) ‘On the optimal growth’, in The Econometric Approach to
Development Planning, Amsterdam: North-Holland.
Lopez, J.A., Ubillos, J.B. and Larrauri J.O. (2001) ‘El Proceso de integracion europea y
la convergencia de los niveles espanoles de gasto en proteccion social’, Revista
Asturiana de Economia, n° 21, 149–66.
Cross-National Research Papers 7 (1), November 2003
European Research Centre
54 Denis Bouget
Malinvaud, E. (1996) ‘Is the European welfare state unsustainable?’, in M. Baldassarri
and L. Paganetto (eds), Equity, Efficiency and Growth: the future of the welfare state,
Basingstoke: Macmillan Press, pp. 237–55.
Micklewright, J. and Stewart, K. (1999) ‘Is the well-being of children converging in the
European Union?’, The Economic Journal, vol. 109, F692–714.
Montanari, I. (2001) ‘Modernization, globalization and the welfare state: a comparative
analysis of old and new convergence of social insurance since 1930’, British Journal
of Sociology, 52 (3), 469–94.
OECD (2003) Social Expenditure, Database-edition.
Pierson, P. (ed.) (2001) The New Politics of the Welfare State, Oxford: Oxford
University Press.
Quintin, O. and Favarel-Dapas, B. (1999) L’Europe sociale: enjeux et réalités, Paris: La
Documentation Française.
Saari, J. (2001) Reforming Social Policy: a study on institutional change in Finland
during the 1990s, Publication of Social Policy Association, n° 56, University of Turku:
Department of Social Policy.
Sharpf, F. and Schmidt, V.A. (eds) (2000) Welfare and Work in the Open Economy;
vol. 1: From Vulnerability to Competitiveness, Oxford: Oxford University Press.
Solow, R.M. (1956) ‘A contribution to the theory of economic growth’, Quartely Journal
of Economics, 70 (1), 65–94.
Swan, T.W. (1956) ‘Economic growth and capital accumulation’, Economic Records,
vol. 32, 334–61.
Swank, D. (2002) Global Capital, Political Institutions, and Policy Change in Developed
Welfare States, Cambridge: Cambridge University Press.
Taylor-Gooby, P. (2002) ‘The silver age of the welfare state. Perspectives on
resilience’, Journal of Social Policy, 31 (4), 597–622.
Taylor-Gooby, P. (2003) ‘Introduction: open market versus welfare citizenship:
conflicting approaches to policy convergence in Europe’, Social Policy and
Administration, 37 (6), 539–54.
Théret, B. (2001) Changes in the French Social Protection System: path
dependencies, timing, and international challenges, Université Paris Dauphine:
CNRS, IRIS.
Unger, B. and van Waarden, F. (1995) ‘Introduction: an interdisciplinary approach to
convergence’, in B. Unger and F. van Waarden (eds), Convergence or Diversity?
Internationalisation and economic policy responses, Aldershot: Avebury, pp. 1–36.
Wilensky, H. (2002) Rich Democracies: political economy, public policy, and
performance, Berkeley: University of California Press.
Wilensky, H.L. (1975) The Welfare State and Equality: structural and ideological roots
of public expenditure, Los Angeles: University of California Press.
Wolf, H. (2002) ‘Globalization and the convergence of social expenditure in the
European Union’, The George Washington Center for the Study of Globalization
(GWCSG), Occasional Paper Series, October.
Cross-National Research Papers 7 (1), November 2003
European Research Centre
Notes on Contributors 55
Notes on Contributors
Denis BOUGET is Professor of Economics at the University of Nantes and Director of
the Maison des Sciences de l’Homme Ange Guépin in Nantes. His research interests
are in social protection and solidarity, social exclusion, long-term care for older people
and decentralisation. He is chair the European Commission funded COST A 15
programme on ‘Reforms of social welfare systems within a context of Europeanisation
and globalisation’ (1999–2004). His main publications in this area include an edited
volume on Comparing Social Welfare Systems in Nordic Europe and France (with B.
Palier, MIRE-DREES, 2000); ‘Convergence in the social welfare systems in Europe:
from goal to reality, Social Policy & Administration, 37 (6), 2003; ‘Convergence in
social welfare systems: what is its meaning?’, Social Policy Review, vol.16, 2003.
Milena BÜCHS is a doctoral student at the Institute for Social Science of the Humboldt
University of Berlin and Marie Curie Fellow at the Centre for Comparative Research in
Social Welfare of the University of Stirling, UK. Her research interests are in European
and EU social policy, using a comparative case study approach.
Ana GUILLÉN is Professor of Sociology in the Department of Applied Economics at
the University of Oviedo in Spain. Her research interests are in comparative public
policy, welfare state development, decision-making processes, European integration
and the Europeanisation of social policy. Her recent publications include: ‘Testing the
“social dumping” hypothesis in sourthern Europe: welfare policies in Greece and Spain
during the last 20 years’, Journal of European Social Policy, 10 (2), 2000;
‘Globalization and the Southern welfare states’ (with S. Álvarez), in R. Sykes, B. Palier
and P.M. Prior (eds), Globalization and European Welfare States: challenges and
change (Palgrave, 2001).
Nick MANNING is Professor of Social Policy and Sociology in the School of Sociology
and Social Policy of the University of Nottingham. His research interests in this area
are in social change and social policy in Russia and East/Central Europe, using
original data gathered through surveys and interviews. His main publications on these
topics include: Work and Welfare in the New Russia (with O. Shkaratan and N.
Tikhonova, Ashgate, 2000); After the Fall: Central and Eastern Europe since the
Collapse of Communism (ed. with R. Bradshaw and S. Thompstone, Olearius Press,
2003); Global Social Policy, 3 (2), special issue on globalisation and Europeanisation
(ed. with B. Palier, 2003); Poverty and Social Exclusion in the New Russia (with N.
Tikhonova, Ashgate, 2004).
Georg VOBRUBA is Professor of Sociology at the University of Leipzig and has
written extensively on conceptual analysis of the welfare state, the future of work and
globalisation. His main publications on these topics include: Jenseits der sozialen
Fragen (Suhrkamp Verlag, 1991); Autonomiegewinne (Passagen Verlag, 1997);
Alternativen zur Vollbeschäftigung (Suhrkamp Verlag 2000), Integration und
Erweiterung: Europa im Globalisierungsdilemma (Passagen Verlag, 2001); ‘The
enlargement crisis of the European Union: limits of the dialectics of integration and
expansion’, Journal of European Social Policy, 13 (1).
Cross-National Research Papers 7 (1), November 2003
European Research Centre